Inside Reynolds American, Inc.’s Upcoming Quarterly Earnings Release

S&P 500 (NYSE:SPY) component Reynolds American, Inc. (NYSE:RAI) will unveil its latest earnings on Tuesday, October 25, 2011. Reynolds American manufactures cigarettes and other tobacco products in the United States.

Reynolds American, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 73 cents per share, a rise of 7.4% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 72 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 73 cents during the last month. For the year, analysts are projecting profit of $2.65 per share, a rise of 6.4% from last year.

Past Earnings Performance: The company fell short of estimates last quarter after being in line with forecasts the quarter prior. In the second quarter, it reported net income of 67 cents per share versus a mean estimate of 70 cents. Two quarters ago, it reported profit of 59 cents per share.

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Wall St. Revenue Expectations: On average, analysts predict $2.3 billion in revenue this quarter, a rise of 2.7% from the year ago quarter. Analysts are forecasting total revenue of $8.67 billion for the year, a rise of 1.4% from last year’s revenue of $8.55 billion.

Analyst Ratings: Analysts are bullish on Reynolds American as four analysts rate it as a buy, none rate it as a sell and four rate it as a hold.

A Look Back: In the second quarter, profit fell 10.9% to $304 million (52 cents a share) from $341 million (59 cents a share) the year earlier, missing analyst expectations. Revenue rose 1% to $2.27 billion from $2.25 billion.

Key Stats:

The decrease in profit in the second quarter broke a streak of three consecutive quarters of year-over-year profit increases. Net income rose more than fourfold in the first quarter, 43.7% in the fourth quarter of the last fiscal year and 5.2% in the third quarter of the last fiscal year.

The company’s revenue has risen for two straight quarters. In the first quarter, the figure rose 0.3%.

Competitors to Watch: Altria Group, Inc. (NYSE:MO), Lorillard Inc. (NYSE:LO), Philip Morris Intl. Inc. (NYSE:PM), British American Tobacco (AMEX:BTI), Vector Group Ltd. (NYSE:VGR), Star Scientific, Inc. (NASDAQ:CIGX) and Universal Corporation (NYSE:UVV).

Stock Price Performance: During July 26, 2011 to October 19, 2011, the stock price had risen $4.14 (11.9%) from $34.87 to $39.01. The stock price saw one of its best stretches over the last year between March 16, 2011 and March 30, 2011 when shares rose for 11-straight days, rising 10.6% (+$3.36) over that span. It saw one of its worst periods between March 8, 2011 and March 16, 2011 when shares fell for seven-straight days, falling 5.2% (-$1.72) over that span. Shares are up $7.78 (+24.9%) year to date.

(Source: Xignite Financials)

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