Reynolds American Inc. Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Reynolds American, Inc. (NYSE:RAI) will unveil its latest earnings on Wednesday, February 8, 2012. 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 profit of 69 cents per share, a rise of 15% 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 67 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 69 cents during the last month. For the year, analysts are projecting net income of $2.78 per share, a rise of 11.6% from last year.

Past Earnings Performance: The company is looking to break the streak of missing estimates in the past two quarters. Last quarter, it fell short of analyst expectations by reporting profit of 70 cents per share against an estimate of net income of 73 cents per share. The quarter before that, it missed forecasts by 3 cents.

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Wall St. Revenue Expectations: On average, analysts predict $2.12 billion in revenue this quarter, a rise of 1.9% from the year ago quarter. Analysts are forecasting total revenue of $8.58 billion for the year, a rise of 0.4% from last year’s revenue of $8.55 billion.

Analyst Ratings: Analysts seem relatively indifferent about Reynolds American with seven of 10 analysts surveyed maintaining a hold rating.

A Look Back: In the third quarter, profit fell 3.7% to $367 million (63 cents a share) from $381 million (65 cents a share) the year earlier, missing analyst expectations. Revenue fell 1.7% to $2.2 billion from $2.24 billion.

Key Stats:

The company has seen net income fall in each of the last two quarters. Net income dropped 10.9% in the second quarter.

A year-over-year revenue decrease in the third quarter snapped a streak of two consecutive quarters of revenue increases. Revenue rose 1% in the second quarter and 0.3% in the first quarter.

Stock Price Performance: During November 4, 2011 to February 2, 2012, the stock price had risen $2.18 (5.8%) from $37.60 to $39.78. 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% (+$3.32) 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% (-$1.70) over that span.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

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