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Lorillard’s Q1 Earnings Miss the Mark; Will Buy E-Cigarette Maker for $135 Million (LO)

Cigarette maker Lorillard Inc. ( LO ) on Wednesday posted first quarter earnings that badly missed Wall Street's expectations and announced a big acquisition of e-cigarette maker blue ecigs.

The Greensboro, NC-based company reported first quarter net income of $223 million, or $1.70 per share, compared with $248 million, or $1.71 per share, in the year-ago period. Excluding one-time items, adjusted profit was $1.74 per share.

Net sales were flat from last year at $1.53 billion.

On average, Wall Street analysts expected a much higher profit of $2 per share, albeit on much lower revenue of $1.20 billion.

In a separate announcement, LO said it acquired electronic cigarette maker blu ecigs for $135 million in cash. The company said it will operate blu as a separate entity and intends to retain blu's current management team.

Lorillard shares fell $5.33, or -4%, in premarket trading Wednesday.

The Bottom Line

We have been recommending shares of Lorillard ( LO ) since Feb.9, when the stock was trading at $113.36. The company has a 4.60% dividend yield, based on last night's closing stock price of $134.82.

Lorillard Inc. ( LO ) is a "Recommended" dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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