Lorillard Inc. : StockCall Scans Altria and Lorillard: Selling Prices Hike, is it a Solution for the Cigarette Makers?
02/12/2013| 08:05am US/Eastern
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LONDON, February 12, 2013 /PRNewswire/ --
The United States cigarette industry faces a number of challenges that have adversely
affected the growth outlook for companies operating in this sector. These have led to a
shrinking market size of cigarette sales by volume over the past years, and this trend
could continue unless the main industry leaders find apt solutions to the current
problems. Altria Group Inc. (NYSE:MO), Lorillard Inc. (NYSE:LO) and other major industry
giants have resorted to increasing cigarette prices to counter declining revenues.
StockCall has taken an interest in these companies and you can now sign up to download the
free technical research on Altria Group and Lorillard at
http://www.stockcall.com/registration
Key threats to the Cigarette Industry
Restrictions already imposed by the FDA under the Family Smoking Prevention and
Tobacco Control Act (the "FSPTCA") enacted in June 2009; actual and proposed excise tax
increases; bans and restrictions on tobacco use imposed by governmental bodies and private
establishments; other illicit trade practices, including the sale of duplicate low quality
tobacco products by third parties; and most crucial of all the increasing health awareness
are all key threats to the industry. In addition, companies have damaged their brand
equity and hindered revenue growth in the last few years. However, due to heavy brand
loyalty the cigarette industry has extremely low price demand elasticity.
Earnings Figures - Altria [http://www.trefis.com/company?hm=MO.trefis ] Group
Cigarettes sales constitute 70% of the total revenue for Altria Group and smokeless
products constitute 16% roughly. Altria Group reported revenue figure of $24 billion and
an adjusted EBITDA figure of $7 billion in 2012. The less sensitivity is likely to keep
the revenue forecast in-line, even though unit sales are likely to decline. The stock
however seems on a bullish run. Sign up today to read the free research report on Altria
Group Inc. at
http://www.StockCall.com/MO021213.pdf
Earnings Figures - Lorillard
The rise in net income in the third quarter broke a streak of two consecutive quarters
of year-over-year profit declines. In the third quarter, net income for Lorillard
increased by 6%, while the figure dropped 2.4% in the second quarter and 10.1% in the
first quarter. The company reported revenue increase for two quarters in a row. In the
most recent quarter, sales rose 2.4% year-over-year to $1.66 billion. The quarter prior to
that that, sales grew by 2.3%. Register to download the free technical analysis on
Lorillard Inc. at
http://www.StockCall.com/LO021213.pdf
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