Reynolds American Inc. on Tuesday lifted its earnings outlook
for the year as its recent acquisition of Newport-cigarette maker
Lorillard Inc. helped drive growth in the second quarter.
Reynolds said it now expects adjusted earnings of $1.90 a share
to $2 a share, up from its previous range of $1.83 to $1.90 a share
in earnings. Reynolds said it expects to narrow its range when it
reports third-quarter earnings.
Reynolds also said it has lifted its dividend by 7.5% and plans
to do a 2-for-1 stock split.
Reynolds recently completed its $25 billion acquisition of
Lorillard, which brought Newport cigarettes, the second-largest
U.S. cigarette brand, to its portfolio. Reynolds has said it plans
to put more sales power behind the menthol brand.
The deal, which closed in June, makes Reynolds a more formidable
challenger to U.S. leader Altria Group Inc. as it has struggled
with diminishing demand for cigarettes alongside growth in the
market for electronic cigarettes.
For the quarter ended June 30, Reynolds said its total cigarette
volume increased 5.6%.
At its RJR Tobacco unit, which includes brands like Camel and
Pall Mall, cigarette shipments were up 4.4%, benefiting from the
inclusion of over two weeks of sales from the Newport brand.
RJR's market share, on a pro-forma basis, edged down 0.1
percentage point to 31.8%.
Overall, Reynolds posted earnings of $1.93 billion, or $3.38 a
share, up from $492 million, or 92 cents a share, in the prior-year
period.
Adjusting for charges related to the Lorillard deal and other
items, per-share earnings were $1.02 a share, up from 89 cents a
share a year earlier. Revenue grew 11% to $2.4 billion.
Analysts polled by Thomson Reuters projected 97 cents a share in
earnings and $2.44 billion in revenue.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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