Imperial Tobacco Earnings Advance on Higher Cigarette Prices

Imperial Tobacco Group Plc (IMT), Europe’s second-biggest cigarette maker, reported higher operating profit as the maker of Davidoff cigarettes increased prices to combat declining shipments in Europe. Adjusted operating profit climbed to 3.16 billion pounds ($5.1 billion) in the 12 months ended Sept. 30 from 3.1 billion pounds a year earlier, the Bristol, England-based company said today.

That compares with the 3.19 billion average estimate of eight analysts surveyed by Bloomberg. The stock rose as much as 2.5 percent, the most since Sept. 20. “Some skeptics are likely to remain unconvinced by today’s results, but we believe that the company is making good progress,” Damian McNeela, an analyst at Panmure Gordon, said in a note to clients today.

Imperial Tobacco has debuted packs that flip open with one hand and flavored filters to goose demand and offset lower consumption in Spain, where a worsening in the economy led it to take a 1.2 billion-pound non-cash impairment charge. Price increases in the U.K., where Imperial is the market leader, also contributed to growth. Profit in the European Union rose 4 percent.

“The EU is tough,” Chief Executive Officer Alison Cooper said in an interview with Cantos. “But we’re growing.” The stock was up 1.4 percent at 2,364 pence at 9:36 a.m. in London. It has gained 5.1 percent over the past year, including reinvested dividends.