Earnings Preview: Lorillard Inc.

MICHAEL FELBERBAUM

RICHMOND, Va. (AP) — Tobacco maker Lorillard Inc. reports its third-quarter results on Monday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: The oldest continuously operating U.S. tobacco company and maker of Newport menthol cigarettes, based in Greensboro, N.C., said in July that it was selling more cigarettes even after it raised prices and a federal tax increase went into effect April 1.

Cigarette volumes at Lorillard, whose brands also include Kent, True, Maverick, Old Gold and Max, increased 2.1 percent for the second quarter, when the company estimated volumes fell 4.1 percent across the industry.

It is the fourth major tobacco company to report on its earnings this month. Altria Group Inc. — owner of the nation's biggest cigarette maker, Philip Morris USA, which makes Marlboros — said cost-cutting and higher cigar sales helped its third-quarter profit rise 1.7 percent, even though it sold fewer cigarettes. Altria said its overall cigarette volume fell 12 percent for the quarter, and it estimated a 10 percent drop industrywide.

Reynolds American Inc. — the second-biggest cigarette seller in the U.S. and maker of Camel and Pall Mall — recorded 72 percent higher profit than in last year's third quarter, when restructuring costs and the falling value of its trademarks dampened its earnings. It said its estimated 11 percent drop in volume was better than the industry's decline, which it pegged at 12.6 percent.