Lorillard Profits from Newport Sales

GREENSBORO, NC ( TheStreet) -- Newport cigarettes are pulling profits for Lorillard ( LO), as the cigarette maker saw a 32% jump in second-quarter earnings.

During the quarter, the company earned $286 million, or $1.71 a share, compared with $217 million, or $1.25 in the year-ago period. Analysts expected a profit of $1.43 a share.

Results were affected by fewer shares outstanding in the current quarter after two buybacks in August 2008 and May 2009.

On Monday, the company also announced an additional repurchase program of up to $750 million of its stock.

Sales in the second quarter surged 42% to $1.52 billion from $1.07 billion on a significant rise in federal excise taxes. Excluding excise taxes, Lorillard's sales increased 16.6%.

Volumes dropped industry-wide during the first quarter as retailers and wholesalers cut orders ahead of a one-time federal tax on inventory.

Lorillard said its cigarette volumes increased 2.1%, while it estimates total industry volumes decreased about 4.1% during the period.

Shipments of its Newport brand decreased about 1.2%, but Newport was still able to increase its market share by about .44 percentage points, to 10.38%.

Last week rival Altria ( MO) said its profit rose 9% as it cut costs and integrated its new acquired smokeless tobacco maker.

But Altria's spun-off division, Philip Morris International ( PM) said earnings sunk 9%, hurt by the stronger dollar.

Reynolds American ( RAI) reported its second-quarter profit climbed 4% as it raised prices and cut costs.

--Reported by Jeanine Poggi in New York City.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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