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LORILLARD, INC Reports Operating Results (10-Q)

July 27, 2012 | About:

LORILLARD, INC (NYSE:LO) filed Quarterly Report for the period ended 2012-06-30.

Lorillard Inc. has a market cap of $17.97 billion; its shares were traded at around $127.54 with a P/E ratio of 17.4 and P/S ratio of 2.8. The dividend yield of Lorillard Inc. stocks is 4.5%.

Highlight of Business Operations:

Net sales. Net sales increased by $39 million, or 2.3%, from $1.692 billion for the three months ended June 30, 2011 to $1.731 billion for the three months ended June 30, 2012. Net sales increased $56 million due to higher average unit prices reflecting price increases in July and December 2011 and June 2012, partially offset by lower unit sales volume ($25 million, including $7 million of federal excise tax). Post acquisition, blu ecigs contributed $8 million to Lorillards total net sales in the three months ended June 30, 2012.

Cost of sales. Cost of sales increased by $26 million, or 2.4%, from $1.093 billion for the three months ended June 30, 2011 to $1.119 billion for the three months ended June 30, 2012. The increase in cost of sales is primarily due to higher expenses related to the State Settlement Agreements ($11 million), higher raw material input costs (primarily tobacco and other direct costs) ($10 million), higher Food and Drug Administration fees ($2 million) and an increase in the Federal Assessment for Tobacco Growers ($2 million), partially offset by lower unit

sales volume ($9 million, including $7 million of federal excise tax). We recorded pre-tax charges for our obligations under the State Settlement Agreements of $364 million and $353 million for the three months ended June 30, 2012 and 2011, respectively, an increase of $11 million. The $11 million increase is due to the inflation adjustment ($10 million) and other adjustments ($2 million), partially offset by the impact of lower unit sales ($1 million).

Net sales. Net sales increased by $30 million, or 0.9%, from $3.227 billion for the six months ended June 30, 2011 to $3.257 billion for the six months ended June 30, 2012. Net sales increased $96 million due to higher average unit prices reflecting price increases in July and December 2011 and June 2012, partially offset by lower unit sales volume ($74 million, including $19 million of federal excise tax). Post acquisition, blu ecigs contributed $8 million to Lorillards total net sales in the six months ended June 30, 2012.

Cost of sales. Cost of sales increased by $37 million, or 1.8%, from $2.085 billion for the six months ended June 30, 2011 to $2.122 billion for the six months ended June 30, 2012. The increase in cost of sales is primarily due to higher expenses related to the State Settlement Agreements ($29 million), higher raw material input costs (primarily tobacco and other direct costs) ($15 million) and higher Food and Drug Administration fees ($4 million), partially offset by lower unit sales volume ($24 million, including $19 million of federal excise tax). We recorded pre-tax charges for our obligations under the State Settlement Agreements of $702 million and $673 million

Read the The complete Report

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10qk
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