Earnings Analysis and Coverage - Lorillard

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Aug 06, 2014, 09:30 ET from Investor-Edge

LONDON, August 6, 2014 /PRNewswire/ --

Investor-Edge.com has issued its free earnings analysis and coverage of Lorillard Inc. (NYSE: LO), which reported its second quarter FY2014 results on Wednesday, July 30, 2014. The company recorded a relatively weaker second quarter earnings with a marginal decline in net sales and GAAP net income. Furthermore, Lorillard announced that it would be acquired by Reynolds American Inc. at an implied enterprise value of $27.4 billion. Access our free coverage report at:


Earnings Overview 

For the second quarter of 2014, Lorillard Inc.'s net sales from its Electronic Cigarette segment declined 35.1% year-over-year, while Cigarette segment net sales grew 0.9% year-over-year. The company was able to improve its domestic retail market share in the Cigarette segment by 0.2 share points year-over-year to 15%. The company's electronic cigarette brand blu eCigs' domestic all-outlet dollar market share of electronic cigarettes decreased 1.1% year-over-year due to list price reduction on rechargeable packs and new products launched by competitors. However, blu eCigs continues to be the market leader in U.S. electronic cigarette category with a 40.9% dollar market share during the 13 weeks ended July 05, 2014. The company's strong operating performance in the Cigarettes segment and impact of share repurchases improved the adjusted diluted earnings per share by 3.7% year-over-year during the reported period. The free research on LO can be downloaded as in PDF format at:


Chairman, President, and CEO Murray S. Kessler stated that while the company has continued to deliver industry-leading cigarette operating and market share performance in Q2 2014, it is also making a significant investment to expand blu eCigs in the U.K. He further said the company's adjusted operating income growth was positively impacted by strong pricing realization and tight cost controls in the Cigarette segment in the second quarter and for the first six months of 2014. Going forward, the chairman hopes that the recent "blu" product launches and the introduction of the "blu" brand in the UK will accelerate future sales and would also help in cementing blu eCigs' position in the e-cigarette segment as the U.S. market-leader and the world's first truly global e-cigarette brand.  

The global cigarette major reported a $5.00 million, or 0.3% year-over-year decline in net sales to $1.80 billion in Q2 FY2014, beating Bloomberg consensus estimates of $1.34 billion. Meanwhile, the company's GAAP net income fell $13 million or 4.2% year-over-year to $300 million, underperforming market expectations of $315 million. On a per-share basis, GAAP earnings were flat at 83 cents, below analysts' estimate of 89 cents. Even though adjusted EPS improved to $0.84 from $0.81 in the year-ago period, it was below consensus estimates of $0.88 per share. Sign up and read the free analyst's notes on LO at:


Stock Performance  

On Wednesday, July 30, 2014, after the earnings release, Lorillard Inc.'s shares fell 0.62% to close the session at $61.21. However, at the last close on Tuesday, August 05, 2014, the company's shares rose marginally, finishing the day 0.10% higher at $60.57. The company's shares oscillated between $60.30 and $61.00 during the trading session. A total of 2.46 million shares were traded, lower than its three months average volume of 3.97 million shares. Lorillard Inc.'s shares have fallen by 5.96% in the last one month, while the stock has advanced 3.75% in the previous three months and 19.51% on YTD basis. The company is trading above its 200-day moving average of $54.27, while the 200-day moving average is below Lorillard Inc.'s 50-day moving average of $61.49. The stock traded at a PE ratio of 19.68 and has a Relative Strength Index (RSI) of 46.06. Visit Investor-Edge and access the latest research on LO at:


Sneak Peek to Corporate Insider Trading  

In the last one month, Lorillard Inc. has not reported any share transactions by insiders to the U.S. Securities and Exchange Commission (SEC). Complimentary in-depth research on LO is available at:


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