Reynolds American Results Surge
February 11 2016 - 9:10AM
Dow Jones News
Reynolds American Inc. on Thursday reported better-than-expected
revenue growth in its latest quarter, driven by last year's
acquisition of the Newport cigarette brand, but offered a 2016
earnings forecast that fell mostly below Wall Street
expectations.
Reynolds American has seen growth driven by its $25 billion
acquisition of Lorillard, which makes the Newport cigarette
brand.
Chief Executive Susan Cameron said Reynolds has entered 2016
with "significant momentum."
Reynolds, the nation's second-largest tobacco company behind
Altria Group Inc., forecast earnings of $2.25 to $2.35 in 2016,
while analysts had forecast $2.34 in earnings.
The company also said it has lifted its quarterly dividend by
17%.
For the fourth quarter, Reynolds said higher pricing and the
inclusion of Newport helped the company deliver a profit of $279
million, or 19 cents a share, up from $148 million, or 14 cents a
share.
Excluding special items, per-share earnings were 48 cents.
Analysts had forecast 50 cents a share in earnings.
Overall sales rose to $3.05 billion from $2.13 billion a year
earlier. Analysts polled by Thomson Reuters had expected $3.04
billion in revenue.
At its RJR Tobacco unit, which includes Camel, Pall Mall and
Newport, volume surged 34.6% from the prior year because of the
inclusion of Newport. That offset a 2% decline in volume for Camel
and a 3.5% decline at Pall Mall.
RJR's market share, on a pro forma basis, was flat at 31.8%,
though Newport's market share ticked up to 13.6% from 13%.
Last month, rival Altria Group reported profit and revenue for
the fourth quarter that missed Wall Street expectations as
cigarette shipments slipped. The company announced it would cut
roughly 5% of its workforce.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 11, 2016 08:55 ET (13:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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