Carolina Group 4Q Profit Shrinks

NEW YORK (AP) -- Carolina Group's profit shrank 6 percent in the fourth quarter,cigarettes because of costs stemming from lawsuits over tobacco, the cigarette maker said Monday. Carolina Group earned $206 million, or $1.18 per share, in the fourth quarter, compared with profit of $220 million, or $1.26 per share, in the fourth quarter of 2006. Carolina Group, a subsidiary of Loews Corp., makes a host of cigarette brands including Newport and Kent. Sales jumped 2 percent to $957 million from $937 million in the fourth quarter. Analysts expected sales of $915 million. Shipments of the company's best-selling brand, Newport, fell 5 percent, while shipments of Kent and True also slipped. Total volume fell 4 percent. In last year's fourth quarter, wholesalers ramped up their purchases anticipating that prices would rise. Sales in the U.S. for the year decreased only slightly, while industrywide sales fell 5 percent, the company said. For 2007, Carolina Group earned $855 million, or $4.91 per share, compared with profit of $760 million, or $4.46 per share, in 2006. Shares fell $3.18, or 3.9 percent, to $77.39 in morning trading.