Loews unit gains profit
Loews Corp. said yesterday that second-quarter profit increased 32 percent at its Carolina Group tracking stock despite restructuring costs.
Lower spending on cigarette promotions helped lift earnings at Carolina Group, which reflects the business performance of Loews' Lorillard Inc. subsidiary. Lorillard, based in Greensboro, makes Newport cigarettes.
Profit for the three months ended June 30 was $187.2 million, compared with $142.1 million in the same period last year.
Earnings per share attributable to Carolina Group shareholders was $1.09 a share, up 33 percent from 82 cents a share in the same period last year.
Sales increased 5.3 percent to $977.3 million as the company spent less on discounting and other promotions.
Martin Orlowsky, the chief executive of Lorillard, said that Newport's retail market share was 8.9 percent in the second quarter, unchanged from the same period last year.
Expenses increased in the quarter because of an early-retirement program. The company said that in the second quarter, the program cost $15.5 million. Orlowsky said that the program was "offered to eligible employees in Lorillard's field sales and market-research units as part of a restructuring program involving these departments that began in April 2006." He did not say how many employees took early retirement.
Orlowsky was asked by an analyst on a conference call whether analysts should be looking for cost savings from the program. Orlowsky said he would not comment specifically "but ultimately we would hope to have some, in a general sense, some savings from this."
Lorillard's Newport brand competes against R.J. Reynolds Tobacco Co.'s Kool and Philip Morris USA Inc.'s Marlboro menthol offerings.
Shares of Carolina Group closed $1.02 higher at $58.40.
