Reynolds American Inc. Earnings: Profit Increase Breaks Streak of Falling Profits

S&P 500 (NYSE:SPY) component Reynolds American Inc. (NYSE:RAI) reported its results for the fourth quarter. Reynolds American manufactures cigarettes and other tobacco products in the United States.

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Reynolds American Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Reynolds American Inc. rose to $304 million (52 cents per share) vs. $262 million (45 cents per share) in the same quarter a year earlier. This marks a rise of 16% from the year earlier quarter.

Revenue: Rose 0.1% to $2.08 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Reynolds American Inc. reported adjusted net income of 72 cents per share. By that measure, the company beat the mean estimate of 69 cents per share. Analysts were expecting revenue of $2.12 billion.

Quoting Management: “Reynolds American finished the year with solid results, despite the challenging economic and competitive environment,” said Daniel M. Delen, RAI’s president and chief executive officer. “I’m pleased to report that RAI continued to make progress in the fourth quarter, increasing earnings and margins while further demonstrating our commitment to returning value to shareholders with the launch of a $2.5 billion share repurchase program. RAI also increased its dividend again in the quarter, bringing the total dividend increase for 2011 to 14.3 percent.”

Key Stats:

The company beat estimates last quarter after falling short in the previous two quarters. In the third quarter, it missed the mark by 3 cents, and in the second quarter, it fell short by 3 cents.

Revenue rose last quarter after seeing a drop the quarter before. Revenue fell 1.7% to $2.2 billion in the third quarter from the year earlier.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the first quarter of the next fiscal year has risen to 65 cents per share from 61 cents. Over the past three months, the average estimate for the fiscal year has climbed from $2.64 per to share to $2.78.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Jose Fajardo at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com