Carolina Group's profit slips 10 percent in 1Q

Carolina Group's profit slipped 10 percent in the first quarter on weaker investment returns and higher advertising costs, the cigarette maker said Monday.

Carolina Group earned $171 million, or 98 cents per share, compared with profit of $189 million, or $1.08 per share, in the first quarter last year.

Analysts polled by Thomson Financial forecast profit of $1.16 per share.

Sales climbed about 1 percent to $921 million from $913 million because of higher prices for cigarettes. Analysts expected sales of $885 million.

Carolina runs cigarette brands including Newport, Kent, True, Max and Satin.

Strong sales growth was offset by payments Carolina Group agreed to make under state settlements for tobacco lawsuits.

Investment income also shrank by $22 million because investments yielded lower interest rates.

Carolina Group has been spending more on advertising and marketing. The company also incurred costs to spin off its Lorillard brand as a separate company.