Richmond, Va. (AP) - Cigarette maker Lorillard Inc. said Monday its net income increased 7 percent in the fourth quarter as it sold more cigarettes at higher prices.
The maker of Newport, Maverick and True cigarettes said it earned $259 million, or $1.74 per share, for the period ended Dec. 31, compared with $242 million, or $1.52 per share, a year earlier. The per share result was boosted by a lower number of shares outstanding.
The nation's third-biggest tobacco company said revenue excluding excise taxes increased more than 9 percent to $1.02 billion.
Analysts expected Lorillard to earn $1.68 per share on revenue of $920.4 million.
In pre-market trading Monday, Lorillard shares rose 4.2 percent, or $3.11, to $78.11.
Lorillard, based in Greensboro, N.C., said its cigarette volume grew 4.5 percent to 9.46 billion cigarettes on gains of 2.2 percent from its Newport brand and increases of about 25.2 percent for its lower-priced brands such as Maverick. The company said the introduction of its non-menthol version of Newport cigarettes in November contributed to the increase.
Rivals Reynolds American Inc. and Altria Group Inc. both reported selling fewer cigarettes in the quarter.
The weak economy and high unemployment have caused many smokers to trade down to cheaper brands during the recession in a bid to save money. Lorillard's Maverick discount brand and Reynolds American's Pall Mall cigarettes have been among the beneficiaries.
Most tobacco companies have been raising prices to keep profits up as the recession and declining demand cut into cigarette sales. Tax increases, smoking bans, health concerns and social stigma also have made the cigarette business tougher.
Lorillard's market share increased 1.2 points during the quarter to 13.2 percent of the U.S. market. Newport's share of the menthol market grew 0.5 points to 35.3 percent of the market.
Despite the Food and Drug Administration's ongoing study of the public health impact of menthol, the segment is stronger than regular cigarettes in a shrinking market. Lorillard's top competitors have ramped up efforts to grab some of those sales.
Lorillard, the oldest continuously operating U.S. tobacco company, spun off from Loews Corp. in 2008. It is the last of the country's top tobacco companies to report fourth-quarter results.
Altria Group, owner of the nation's biggest cigarette maker -- Philip Morris USA -- said raising prices and cutting costs helped its fourth-quarter net income climb nearly 27 percent. The number of cigarettes it shipped fell 7 percent.
Meanwhile, No. 2 Reynolds American said its net income rose more than 43 percent on higher prices and lower costs. The number of cigarettes the company sold fell 5.1 percent.