Lorillard 3Q Profit Dips Partly On Higher Expenses

MICHAEL FELBERBAUM

RICHMOND, Va. (AP) — Lorillard Inc., the nation's third-largest cigarette maker, saw less of a decline in cigarettes sold in the third quarter than its competitors as its value brands posted big gains.

Lorillard, whose other brands include Kent, True and Maverick, faced declining volumes of about 6.1 percent during the period, compared with its estimate of a total industry decline of 12.6 percent.

The company saw a 9.8 percent decline in volumes for its Newport brand, but a 51.9 percent increase in its value-priced Maverick brand. Some smokers have traded down to cheaper cigarette brands during the recession in an effort to cut spending.

The Greensboro, N.C.-based maker of Newport menthol cigarettes was the last of the country's top tobacco companies to report its third-quarter results.

Results from the three tobacco makers, who account for about 90 percent of the U.S. cigarette market, show steep volume declines as a new 62-cents-a-pack federal tax, smoking bans, health concerns and social stigma make the cigarette business tougher.

CEO Martin Orlowsky said in a conference call with investors that while the company outperformed the industry, he acknowledged lower retail inventories industrywide to keep stock in line with reduced demand.