Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  Reynolds American, Inc.    RAI

Delayed Quote. Delayed  - 02/21 05:21:41 pm
60.86 USD   +0.21%
02/09 REYNOLDS AMERIC : Quarterly Earnings Notice
02/09DJReynolds American Profit and Revenue Climb
02/09 REYNOLDS AMERIC : beats 4Q profit forecasts
News SummaryMost relevantAll newsSector newsTweets 

Reynolds American 1Q Profit Falls 29% On Charges

share with twitter share with LinkedIn share with facebook
share via e-mail
04/24/2012 | 03:41pm CET

--Reynolds and rivals face difficult operating environment as cigarette volumes have been declining for years

--Major players have responded by enacting price hikes and cutting costs the help boost profitability

--Latest results aided by growth for smokeless tobacco

(Updates throughout with additional background, analyst commentary and the latest stock quote.)

   By John Kell 

Reynolds American Inc.'s (>> Reynolds American, Inc.) first-quarter earnings fell 29% as the tobacco company booked restructuring-related charges and as cigarette sales volume dropped more than the broader industry.

Reynolds American and rival tobacco firms face a difficult operating environment as cigarette volumes have been declining for years and a weak economy and high unemployment continue to pressure consumer disposable income.

The major players have responded by enacting price hikes and cutting costs to help bolster profitability. Reynolds American last month said it would cut its U.S. work force by about 10% by the end of 2014, echoing a cost-cutting move by Altria Group Inc. (>> Altria Group, Inc.). Those job cuts were part of a comprehensive review of the company's business, as Reynolds American sought to get operations in line with the current business landscape.

Cigarette volume for the nation's second-largest tobacco company behind Altria, excluding private-label brands, dropped 5.1% in 2011 from the prior year, compared with an overall industry decline of 3.5%. The company has shifted its focus on key brands and has also diversified into smokeless tobacco and dissolvables in an effort to seek broader appeal.

In the first quarter, Reynolds American's cigarette volume, excluding private-label brands, slid 5.6%. That was worse than the industrywide 4% decline as the company was hurt by high levels of promotional pricing and lower wholesale inventories.

On a positive note, total volume at American Snuff, the smokeless tobacco unit that makes Grizzly and Kodiak moist snuff, was up 7.6% and outpaced the industry's increase of about 5%.

Reynolds American reported a profit of $270 million, or 47 cents a share, down from $381 million, or 65 cents a share, a year earlier. Excluding restructuring-related costs and other items, earnings were down at 63 cents from 64 cents. Revenue decreased 2.9% to $1.93 billion.

Analysts polled by Thomson Reuters most recently projected earnings of 65 cents on revenue of $1.98 billion.

Gross margin edged up to 48.6% from 48%.

The key Camel and Pall Mall brands posted a relatively steady quarter. Camel in particular fared well as volume rose 4.4% and market share inched up 0.1 percentage point. Pall Mall's market share was flat at 8.5%, though volume dropped 5.2% as the line sees competition from lower-priced line extensions from Altria's Marlboro and Lorillard Inc.'s (LO) Newport, as well as standalone brands like L&M and Maverick.

Citi analyst Vivien Azer called Camel's volume growth "a welcome surprise," saying she had been concerned that the brand would come under more pressure from Altria's repackaged products and the promotion of Marlboro Black.

Total R.J. Reynolds cigarette market share dropped 1.2 percentage points to 26.8%.

Analysts praised two rounds of price increases by the three largest U.S. tobacco companies last year, as it signaled they continue to command strong pricing power. The price hikes were enacted even as state excise taxes have been fairly muted. After surveying tobacco-industry trade contacts, Wells Fargo recently said another round of retail price hikes could be coming in May or June.

Dividend yields and strong cash flows drew investors to tobacco stocks last year, but shares of the four major publicly traded companies have been mixed in 2012 as the industry's valuations are at the upper end of the historical range. Shares of Reynolds American, which affirmed its full-year earnings guidance, were down 1.7% to $41 in premarket trading.

Results from Altria and Lorillard are due later this week.

-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

--Tess Stynes contributed to this article

Stocks mentioned in the article : Reynolds American, Inc., Altria Group, Inc.
share with twitter share with LinkedIn share with facebook
share via e-mail
02/09 REYNOLDS AMERICAN : Quarterly Earnings Notice
02/09DJReynolds American Profit and Revenue Climb
02/09 REYNOLDS AMERICAN : Management's Discussion and Analysis of Financial Condition ..
02/09 REYNOLDS AMERICAN : beats 4Q profit forecasts
02/09 REYNOLDS AMERICAN INC : Results of Operations and Financial Condition, Financial..
02/09 REYNOLDS AMERICAN : Battling Menthol Restrictions, R.J. Reynolds Reaches Out to ..
02/08 REYNOLDS AMERICAN INC : Change in Directors or Principal Officers, Financial Sta..
02/07 THE BRIEFCASE THE BRIEFCASE : American Spirit marketing lawsuit hearing set
02/07 REYNOLDS AMERICAN : The briefcase
02/02 REYNOLDS AMERICAN : RAI to Release 4Q16 Results on Feb. 9
More news
Sector news : Tobacco - NEC
02/16 FTSE retreats from one-month peak, mid-cap index snaps winning streak
02/14DJPHILIP MORRIS INTERNATIONAL : Thailand Slaps Philip Morris With More Tax Evasion..
02/09DJReynolds American Profit and Revenue Climb
02/07DJITC : Indian Government Sells 2% Stake in ITC for $997 Million
02/03DJALTRIA : Investigating Whether Recalled Products Were Tampered With -- 2nd Updat..
More sector news : Tobacco - NEC
News from SeekingAlpha
02/20 MONTHLY REVIEW OF DIVGRO : January 2017
02/18 Tracking David Winters' Wintergreen Advisers Portfolio - Q4 2016 Update
02/17 FDA tobacco advisory panel meeting set
02/15 Top Merger Stocks Held By Fund Managers (Mid-Q1 2017 Edition)
02/13 RBC Capital calls a top on Reynolds American
Financials ($)
Sales 2017 12 982 M
EBIT 2017 6 374 M
Net income 2017 3 595 M
Debt 2017 11 116 M
Yield 2017 3,33%
P/E ratio 2017 24,01
P/E ratio 2018 22,29
EV / Sales 2017 7,53x
EV / Sales 2018 7,26x
Capitalization 86 597 M
More Financials
Duration : Period :
Reynolds American, Inc. Technical Analysis Chart | RAI | US7617131062 | 4-Traders
Full-screen chart
Technical analysis trends REYNOLDS AMERICAN...
Short TermMid-TermLong Term
Technical analysis
Income Statement Evolution
More Financials
Mean consensus HOLD
Number of Analysts 11
Average target price 59,7 $
Spread / Average Target -1,7%
Consensus details
EPS Revisions
More Estimates Revisions
Debra Ann Crew President, Chief Executive Officer & Director
Susan M. Cameron Executive Chairman
Andrew D. Gilchrist Chief Financial Officer & Executive Vice President
Nana Mensah Independent Director
Martin D. Feinstein Independent Non-Executive Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
ESSENTRA PLC4.97%1 585
More Results