Reynolds American Earns 60 Cents Per Share

For Q4, Reynolds American (RAI) earned 60 cents per share which was a penny below the Street. The company sees full-year 2011 earnings-per-share coming in between $2.60 and $2.70.

The number of cigarettes sold fell by 5.1% but the total revenue in dollars fell just by less than 1%. In other words, RAI was able to raise prices. I was very impressed by RAI’s gross margins which rose from 45.2% to 46.8%.

The shares pulled back below $32, but don’t be alarmed, Reynolds is still a very good buy. The stock pays a quarterly dividend of 49 cents per share which works out to a yield of 6.1% at the current share price.

Posted by on February 3rd, 2011 at 10:41 am


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