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GREENSBORO, N.C -- Lorillard Inc. saw a 7 percent increase in profits on volume growth and market-share gains for its Newport and discount brands.
According to the Wall Street Journal, Lorillard's domestic volume rose 4.6 percent in the fourth quarter while industry-wide volumes decreased 4.7 percent. Lorillard's uptick can be attributed to higher shipments of Newport and Maverick.
The company also noted in a press release that net income for 2010 reached $1.029 billion compared to $948 billion in 2009. This was the first time net income rose above the $1-billion mark.
"Lorillard continued to fire on all cylinders during the fourth quarter leading to record annual results in net sales, net earnings, earnings per diluted share and retail market share," said Murray S. Kessler, chairman, president and chief executive officer, in a company statement. "Based on our current strategic review process, which is well under way, I remain confident in the company's future and its ability to deliver a double digit shareholder return over the long term."
One possible wrinkle in the Lorillard's future is the Food and Drug Administration's review of menthol, which could lead to a possible ban. If so, Lorillard's Newport brand could be affected. An FDA task force is expected to submit a nonbinding recommendation to the agency next month.
Aside from its menthol cigarettes, Lorillard introduced a non-menthol brand in November 2009, Newport Non Menthol Box and Newport Non Menthol Box 100, as CSNews Online previously reported.
According to the Wall Street Journal, the non-menthol brand contributed 0.5 points as Newport gained 0.8 points to capture 11.2 percent of the domestic cigarette market. "We are encouraged with what we see so far," Kessler said.