Reynolds American Sales Climb, Helped by Lorillard
26 July 2016 - 10:20PM
Dow Jones News
Reynolds American Inc. said sales climbed 33% in its latest
quarter as the tobacco company continues to benefit from last
year's acquisition of rival Lorillard Inc., though results fell
short of expectations.
Last year, the second- and third-biggest U.S. cigarette makers
agreed to a $25 billion tie up that would make it better able to
compete with industry leader and Marlboro owner Altria Group Inc.
Through the deal, Reynolds, maker of Camel and Pall Mall brands,
has folded in top-selling menthol cigarette Newport.
Chief Executive Susan Cameron said Reynolds finished the
integration during its June period, six months ahead of schedule
and as Newport gained a half-point of market share, to 13.9%. The
performance, driven by a sixfold increase in sales volume to 8.8
billion, helped boost Reynolds's overall market share to 34.5% from
34% a year earlier.
Total cigarette volume rose 57% to 18.9 billion as the Newport
brand offset a 2.8% decline in Camel and a 5.4% fall in Pall Mall
volume.
In all for the three months ended June 30, the company reported
a profit of $796 million, or 56 cents a share, down from $1.93
billion, or $1.69 a share, a year earlier. The decline was largely
due to a gain in the year-ago period on divestitures that the
company had to make to seal the Lorillard deal. Excluding that and
other items, earnings per share rose to 58 cents from 51 cents.
Revenue increased to $3.2 billion from $2.4 billion. Analysts
had projected 61 cents in per-share profit and $3.26 billion in
sales, according to Thomson Reuters.
Shares in the company, up 13% this year, were inactive during
premarket trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
July 26, 2016 08:05 ET (12:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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