Lorillard Posts 10% Profit Increase, E-Cigs Credited
Tobacco giant Lorillard (maker of Kents and Newports here in the U.S.) posted a strong increase in profits for its second quarter earnings report this year. Analysts have largely praised Lorillard’s decision to purchase electronic cigarette company Blu Cigs early last year. It seems to be paying off.
According to a report from the associated press, Lorillard sales were $313 million — a nice chunk more than the $284 million they made the year previous. The purchase of Blu Cigs was unexpected by many, though it was immediately considered a good move by many analysts.
According to the report, Blu has captured 40% of brick and mortar retail sales of e-cigs. The company has been expanding rapidly with both TV advertising and product placement to get in front of consumers. Lorillard also announced Thursday that it plans to extend sales into Canada.
The Canadian electronic cigarette market is still a largely untapped one. So untapped in fact that electronic cigarette industry trade organization SFATA held a webinar for industry leaders over the summer just to explain that there is a market and how to break into it.
However that turns out, the purchase of Blu is still appearing to be a wildly beneficial move on Lorillard’s part as the $57 million it contributed to Lorillard’s bottom line helped offset the shrinking tobacco cigarettes market.