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Universal Corp. Reports Operating Results (10-K)

May 25, 2012 | About:

Universal Corp. (NYSE:UVV) filed Annual Report for the period ended 2012-03-31.

Univl Corp -va has a market cap of $1.03 billion; its shares were traded at around $45.45 with a P/E ratio of 9.3 and P/S ratio of 0.4. The dividend yield of Univl Corp -va stocks is 4.4%. Univl Corp -va had an annual average earning growth of 17.6% over the past 10 years.

Highlight of Business Operations:

Our North America and Other Regions reportable segments, which represent our flue-cured and burley tobacco operations, accounted for 13% and 77% of our revenues and 13% and 81% of our segment operating income, respectively, in fiscal year 2012. Our Other Tobacco Operations reportable segment accounted for 10% of our revenues and 6% of our segment operating income in fiscal year 2012. Sales and other operating revenues and operating income attributable to our reportable segments for each of the last three fiscal years, along with segment assets for each reportable segment at March 31, 2012, 2011, and 2010, are set forth in Note 15 to the consolidated financial statements, which are included in Item 8 of this Annual Report. Information with respect to the geographic distribution of our revenues and long-lived assets is also set forth in Note 15 to the consolidated financial statements.

For the fiscal year ended March 31, 2012, operating income for the flue-cured and burley leaf tobacco operations, which includes the North America and Other Regions segments, was about $211 million, an 8% decrease compared to the prior year's results of about $229 million. The decline reflected improved operating results for the year in the Other Regions segment, which were outweighed by reduced earnings in the North America segment. Revenues for the group were down about 3%, to $2.2 billion due to lower leaf prices, despite higher volumes for the year.

Operating income of $180.7 million for the Other Regions segment was up 6%, compared to $170 million for the prior year. In Africa, higher sales volumes in some origins, partly due to completion of more shipments prior to fiscal year-end, mitigated tighter margins and lower third-party processing income. Earnings also benefited from the reversal of statutory severance obligations there. Earnings in the South America region were down, although the effect of reduced sales volumes related to last year's assignment of farmer contracts was moderated significantly by increased sales to new and existing customers, as well as lower costs from restructuring activities and a smaller farmer base in Brazil. In Europe, results improved on higher shipments and an insurance recovery, while Asia experienced declines in the period, primarily due to reduced trading volumes and inventory adjustments. Selling, general, and administrative expenses for the segment were flat for the year, and cost of goods sold declined about 4% due mostly to reduced green leaf prices and the effect of increased toll processing in Brazil. In addition, results for the Other Regions segment included $12 million in dividend income from unconsolidated subsidiaries. Revenues for the segment of $1.9 billion were relatively flat as higher overall volumes combined with lower prices in most regions and a less favorable mix.

For the fiscal year ended March 31, 2011, diluted earnings per share were $5.42, down about 5% from record earnings of $5.68 per diluted share for the fiscal year ended March 31, 2010. Net income attributable to Universal Corporation for fiscal year 2011 was $156.6 million, a decrease of 7% compared to $168.4 million for fiscal year 2010, primarily due to lower results in our South American operations and Oriental tobacco joint venture. Revenues for fiscal year 2011 were $2.6 billion, a 3% increase compared to fiscal year 2010, reflecting higher selling prices on lower volumes shipped during the period. The price increases were generally related to higher green leaf costs and the effects of a weak U.S. dollar.

Cost of goods sold increased by nearly 6% due to the influence on leaf prices of a weaker U.S. dollar and higher farm input costs, as well as a lower proportion of stem in the sales mix. Selling, general, and administrative expenses decreased by $26 million, or 9%, compared to fiscal year 2010. Predominant factors in the reduced expense for fiscal year 2011 included an $11 million comparative benefit from net currency remeasurement and exchange gains in fiscal year 2011 compared with net losses in fiscal year 2010, accruals in fiscal year 2010 for costs associated with the Foreign Corrupt Practices Act (“FCPA”) matter, and lower compensation expense.

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