Reynolds American Inc. Earnings Cheat Sheet: Two Straight Quarters of Profit Drops

Rising revenue was not enough for S&P 500 (NYSE:SPY) component Reynolds American Inc. (NYSE:RAI) as the cigarette company saw profit fall in the third quarter. Reynolds American manufactures cigarettes and other tobacco products in the United States.

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Reynolds American Earnings Cheat Sheet for the Third Quarter

Results: Net income for Reynolds American Inc. fell to $367 million (63 cents per share) vs. $381 million (65 cents per share) a year earlier. This is a decline of 3.7% from the year earlier quarter.

Revenue: Fell 2% to $2.2 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: RAI reported adjusted net income of 70 cents per share. By that measure, the company fell short of mean estimate of 73 cents per share. It beat the average revenue estimate of $2.3 billion.

Quoting Management: “Reynolds American continues to deliver solid financial results in this challenging environment, while our transformation strategy shapes the business for long-term success,” said Daniel M. Delen, RAI’s president and chief executive officer. “This performance once again demonstrates our ability to overcome near-term challenges while continuing to position our business for future growth.”

Key Stats:

The company has now seen net income fall in each of the last two quarters. In the second quarter, net income fell 10.9% from the year earlier quarter.

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 3 cents with net income of 67 cents versus a mean estimate of net income of 70 cents per share.

Looking Forward: Expectations for the fourth quarter have not changed from 66 cents. The average estimate for the fiscal year is $2.65 per share, down from $2.66 ninety days ago.

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).

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(Source: Xignite Financials)

 

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