Wednesday, July 29, 2009

Another Tobacco Company raking in profits

The manufacturer of Newport cigarettes, Lorillard, Inc., increased it's profits this year, despite a decrease in cigarette imports into the United States.

Many tobacco retailers reduced orders at the beginning of the year because they had to pay a 62-cent one-time "floor tax" on all on-hand inventory before April 1, when the federal tax-per-pack went up.

Analysts expected tobacco profits to drop as well. However, Lorillard and it's two largest competitors, Altria and Reynolds American, also did better than expected in second quarter results.

Lorillard increased its market share in the second quarter even amid a reduction in cigarette imports. The company credited cutting costs and acquiring a smokeless tobacco manufacturer for the healthy financial returns.

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