(GREENSBORO) -- Lorillard, Inc. reported third quarter net income of $267 million. This is down from $274 million during the same period last year.  as higher costs offset selling more cigarettes at higher prices.

Net sales increased $55 million to $1.622 billion in the third quarter, driven by higher prices and greater volume. The sales increase was offset by higher costs.

"The Company achieved significant market share gains in all market categories and all sales regions," said Murray S. Kessler, Chairman, President and Chief Executive Officer.  "Continued strong fundamentals combined with normalized wholesale inventories bode well for a strong fourth quarter finish to an already outstanding 2011."

The Greensboro based company experienced a third quarter selling, general and administrative cost increase of $7 million to $108 million. The increase was primarily due to higher compensation costs, higher legal costs related to the Engle Progeny litigation and higher marketing and other costs related to the Company's strategic initiatives, including market research and advertising support of Newport Non-Menthol.