By Angela Chen
Reynolds American Inc.'s revenue grew 6.3% in the March quarter
due to higher pricing that offset declining volumes.
Results beat Wall Street expectations, sending shares up 1.7% in
light premarket trading.
Reynolds is in the midst of a $25 billion acquisition of Newport
cigarette maker Lorillard Inc. Both companies' shareholders have
approved the deal, though the Federal Trade Commission's review
continues. Reynolds said the deal should close by midyear.
The tie-up comes as Reynolds struggles with diminishing demand
for cigarettes alongside growth in the market for electronic
cigarettes. The company just finished the national rollout of its
Vuse electronic cigarette.
For the quarter ended March 31, Reynolds said cigarette
shipments at its RJR Tobacco unit, which includes brands like Camel
and Pall Mall, fell 2.4%, while RJR's market share fell by 0.5
percentage points to 26.1%.
Overall, Reynolds posted earnings of $389 million, or 73 cents a
share, up from $363 million, or 67 cents a share, in the prior-year
period.
Excluding a one-time benefit and other items, per-share earnings
were 86 cents, up from 72 cents a year ago.
Revenue grew 6.3% to $2.06 billion.
Analysts polled by Thomson Reuters projected 80 cents a share in
earnings and $1.98 billion in revenue.
The company reaffirmed its full-year guidance.
Write to Angela Chen at angela.chen@dowjones.com
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