Reynolds American, Inc. Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Reynolds American, Inc. (NYSE:RAI) will unveil its latest earnings on Friday, July 22, 2011. Reynolds American, Inc. manufactures cigarettes and other tobacco products in the United States. Your Cheat Sheet to the Money Gushing Tobacco Industry>>

Reynolds American, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 71 cents per share, a rise of 7.6% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged and it has not changed during the last month. For the year, analysts are projecting profit of $2.68 per share, a rise of 7.6% from last year.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the first quarter, the company reported net income of 59 cents per share versus a mean estimate of profit of 59 cents per share. In the fourth quarter of the last fiscal year, the company beat estimates by one cent.

Savvy Investing Tip: Our CHEAT SHEET investing framework recommends only stocks with two straight quarters of earnings growth. Learn More >>

Wall St. Revenue Expectations: On average, analysts predict $2.27 billion in revenue this quarter, a rise of 1.3% from the year ago quarter. Analysts are forecasting total revenue of $8.7 billion for the year, a rise of 1.8% from last year’s revenue of $8.55 billion.

Analyst Ratings: Analysts are bullish on this stock with five analysts rating it as a buy, none rating it as a sell and four rating it as a hold. Over the past 90 days, the average rating for the stock has moved up from hold to moderate buy.

Key Stats:

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose more than fourfold while it rose 43.7% in the fourth quarter of the last fiscal year and 5.2% in the third quarter of the last fiscal year.

Revenue rose in the first quarter after seeing a drop the quarter before. Revenue rose 0.3% to $1.99 billion in the first quarter from the year earlier. In the fourth quarter of the last fiscal year, revenue fell 0.7%.

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), Imperial Tobacco Group PLC (ITYBY), Universal Corporation (NYSE:UVV), and Tutunski Kombinat AD Prilep (TKPR).

Stock Price Performance: During May 19, 2011 to July 18, 2011, the stock price had fallen $1.92 (-4.9%) from $38.97 to $37.05. 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% (+$3.41) 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 5.1% (-$1.74) over that span. Shares are up $5.37 (+17%) year to date.

(Source: Xignite Financials)

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