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Universal Corp's Q2 profit unchanged; revenue up 2.5%

Published: 21:45 05 Nov 2010 GMT

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Universal Corp. (NYSE: UVV), a tobacco company based in Virginia, said today that fiscal second quarter profit was almost unchanged from last year as shipment delays and lower margins hindered results.

For the second quarter, the company earned $48.1 million, or $1.78 per diluted share, compared to last year's net income of $48.8 million, or $1.77 per diluted share.

Second quarter profit was negatively affected by lower margins and shipping delays, which was offset by the reversal of the European Commission's fine associated with the company’s Deltafina subsidiary.

The reversal of the European Commission's decision added about $7.4 million to pre-tax income, or 17 cents per diluted share. 
Revenue for the quarter increased 2.5% to $664 million.

Flue-cured and burley leaf tobacco sales, the company's main products, declined about 6% year-over-year to about $1.1 billion.  Universal mainly sells its Flue-cured and burley leaf tobacco outside of North America, which accounted for only 11% of second quarter sales.

As a result of the shipping delays, second quarter operating income for this segment declined 20% to $106.6 million.

The company's other tobacco operations, which includes its dark tobacco products, also saw its operating income plummet 43% as margins declined to $12 million.

At quarter end, the company had $1.8 billion in current assets, of which $43 million was in cash.  Total liabilities stood at $1.3 billion, with $807 million due within a year.

As of 1:29 pm ET, the company's share price was trading at $43.54, 1.6% higher than its closing share price on Thursday.

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