Reynolds American Earns 67 Cents Per Share

In this week’s CWS Market Review, I said that Wall Street’s earnings estimate for Reynolds American ($RAI) was probably too high. The company just reported second-quarter earnings of 67 cents per share, four cents below estimates.

Cigarette maker Reynolds American says its second-quarter profit fell more than 10 percent on charges related to a legal case and costs related to plant closings.

Excluding those charges, the nation’s second-biggest tobacco company said its profit rose 2 percent as higher prices and smokeless tobacco gains offset cigarette volume declines.

The maker of Camel, Pall Mall and Natural American Spirit brand cigarettes says its net income fell to $304 million, or 52 cents per share, for the period ended June 30. That’s down from $341 million, or 58 cents per share, a year ago.

Adjusted earnings were 67 cents per share. Analysts expected 71 cents per share.

Revenue excluding excise taxes rose less than 1 percent to $2.27 billion, beating analyst estimates for the Winston-Salem, N.C., company.

The stock gapped down this morning which brought the yield close to 6%, but it’s starting to recover.

Posted by on July 22nd, 2011 at 10:15 am


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