Cigarette manufacturerLorillard (
) Wednesday got smoked by a poor earnings report.
The Greensboro, N.C. company reported 82 cents a share, a
meager 4% increase in adjusted earnings for the fourth quarter.
Analysts were looking for 86 cents. Sales inched up 2% to $1.74
billion as higher cigarette prices helped offset a drop in
For the quarter, unit volume fell 1.6% from the year-ago
period in the U.S., Puerto Rico and U.S. territories. Lorillard
said it estimates domestic shipments slid 6.2% in Q4.
But the company noted that it increased its market share for
the 11th year in a row, to 14.9%, thanks largely to its Newport
Its blu eCigs e-cigarette brand, the company added, continues
to establish itself as the category leader, winning 48% market
share in the quarter and 47% for the full year.
The stock fell 2.48 to close at 47.47, a nearly 5% drop.
Volume was 289% above average. The stock finished off its low of
the day and found support at its 200-day moving average.
Lorillard is the world's third largest tobacco company and the
oldest in continuous operation, having been founded in 1760.
Newport is its flagship brand. It also makes Kent, True, Maverick
and Old Gold.
It acquired blu eCigs in 2012.
Despite the stumble, Lorillard has a five-year annualized
growth rate of 13% and an Earnings Stability Factor of 2 on a 0
to 99 scale, where low numbers correspond to stable earnings
Its dividend is 55 cents a quarter, which translates to $2.20
a year for an annualized yield of about 4.5% at the current stock
The dividend is up from 92 cents in 2008.
Analysts are looking for a 15% EPS gain in the next report and
15% overall growth in 2014.
They're looking for 11% growth in 2015.
Despite the stigma that's been attached to smoking over past
decades, Lorillard is trading only 10% off an all-time high.