Lorillard’s domestic wholesale cigarette shipment volume during the third quarter of this year, at 10,073 million, was down by 1.9 per cent on that of the third quarter of 2013.
Full price cigarette volume, at 8,645 million, was down by 1.5 percent, with Newport’s volume down by 1.4 percent to 8,575 million, True’s volume down by 14.3 percent to 37 million and Kent’s volume down by 13.3 percent to 34 million.
Price/value volume, at 1,428 million, was down by 4.3 percent, with Maverick sales down by 4.0 percent to 1,322 million and Old Gold volume down by 8.2 percent to 105 million.
Non-domestic (Puerto Rico and US Possessions) volume was down by 15.4 percent to 131 million; so Lorillard’s overall volume was down by 2.1 per cent to 10,204 million.
Lorillard’s domestic market share during the third quarter, at 15.1 percent, was said to have been up by 0.3 of a percentage point from that of the third quarter of 2013, while its share of the menthol segment of the market, at 40.2 percent was unchanged.
The industry-wide menthol share of the overall domestic market was up by 0.2 of a percentage point to 31.6 percent.
Newport’s share of the domestic market, at 12.8 per cent, was up by 0.3 of a percentage point, but its share of the menthol segment was down by 0.1 of a percentage point to 36.9 percent.
Meanwhile, net cigarette sales during the third quarter, at $1,831 million, were increased by 0.2 percent on those of the third quarter of 2013, $1,827 million. Net sales of traditional cigarettes were up by 1.6 percent from $1,764 million to $1,793 million, but net sales of electronic cigarettes dropped 39.7 percent from $63 million to $38 million.
The decline in sales of blu eCigs in the US was said to have reflected a decrease in unit volume, which, in turn, was attributed to two factors. ‘First, an unfavorable comparison to the year ago period that included significant pipeline inventory as the brand was in its initial phase of national expansion’ the Lorillard report said. ‘And second, the brand was negatively impacted by competitors’ new national product launches which were supported by aggressive introductory “free trial” promotional programs.
‘Notably, the third quarter launch of blu eCigs cherry disposable products helped contribute a sequential increase in US net sales of $4 million to $37 million for the brand.’
Lorillard’s net sales during the third quarter, at $1.831 billion, were increased by 0.2 percent on those of the third quarter of 2013.
Its reported operating income was increased by 12.9 percent to $517 million, while its adjusted operating income increased by 5.4 percent to $570 million.
Its reported net income was increased by 12.0 percent to $289 million and its adjusted net income was up by 5.2 percent to $326 million.
And its reported diluted earnings per share increased by 15.9 percent to $0.80, while its adjusted diluted earnings per share increased by 8.4 percent to $0.90.
“Lorillard delivered strong third quarter financial and operating results including robust cigarettes segment adjusted operating profit and profit margin growth, continued cigarette market share gains as well as a sequential increase in blu eCigs domestic net sales despite heavy competitive e-cig discounting,” said chairman, president and CEO, Murray S. Kessler.
“Overall, we are very pleased that the company’s continued industry-leading fundamental performance has resulted in adjusted EPS growth of over eight percent during the quarter, consistent with our commitment to deliver a double digit total shareholder return as measured by EPS growth and the dividend yield over the long-term.
“Also in the third quarter, the company continued to work toward shareholder and regulatory approval pursuant to our merger agreement with Reynolds American and we view those activities as proceeding smoothly. We are very excited about completing the combination with Reynolds, which we expect to occur in the first half of 2015, as it delivers significant and immediate value to our shareholders, as well as a meaningful ownership stake in the combined company that will enjoy multiple flagship tobacco brands well-positioned for continued long-term success.”