Monday, September 1st21.6°C
23003
22768

Camel maker Reynolds 1Q profit falls more than 28 pct on lower cigarette sales, higher costs

RICHMOND, Va. - Reynolds American Inc.'s first-quarter profit fell more than 28 per cent as the company sold fewer cigarettes and spent more on expanding its electronic cigarette brand and legal costs.

The nation's second-biggest tobacco company on Wednesday reported earnings of $363 million, or 67 cents per share, for the quarter ended March. 31. That's down from $508 million, or 92 cents per share, a year earlier.

Adjusted earnings were 72 cents per share, missing Wall Street estimates by 2 cents.

The Winston-Salem, N.C., maker of Camel and Pall Mall cigarettes said revenue excluding excise taxes increased nearly 3 per cent to $1.93 billion. Analysts polled by FactSet expected $1.91 billion.

The company said its R.J. Reynolds Tobacco subsidiary sold 14.3 billion cigarettes, a decline of about 4 per cent, compared with a estimated decline of about 3 per cent for the industry as a whole.

Volumes for Camel grew 2.5 per cent and volumes for Pall Mall were flat. The brands account for more than 60 per cent of the company's total cigarette volume. Shipments of its other brands, which include Winston, Kool, Doral and Salem, fell about 13 per cent.

Camel's market share increased 0.4 percentage points to 10 per cent of the U.S. market, while Pall Mall's market share grew 0.3 percentage points to 9.5 per cent.

The company has promoted Pall Mall as a longer-lasting and more affordable cigarette as smokers weather the weak economy and high unemployment.

The number of Natural American Spirit cigarettes sold by its Santa Fe Natural Tobacco subsidiary grew nearly 11 per cent to 800 million.

Reynolds and other tobacco companies are also focusing on cigarette alternatives such as snuff, chewing tobacco and electronic cigarettes as tax hikes, smoking bans, health concerns and social stigma make the cigarette business tougher.

Volume for its smokeless tobacco brands including Grizzly and Kodiak rose about 11 per cent compared with a year ago. The brands had a 34.6 per cent share of the U.S. retail market, though that market is tiny compared with cigarettes.

The company said its Vuse brand electronic cigarette is on track for its initial wave of national distribution this summer. It expects spending on the brand, which is currently in Colorado and Utah, to increase in the second quarter.

Reynolds American on Wednesday also reaffirmed its full-year 2014 earnings forecast in the range of $3.30 and $3.45 per share. Analysts expect $3.37 per share.

___

Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum .

The Canadian Press


Read more Business News

22364


Recent Trending




Today's Market
S&P TSX15625.73+67.561
S&P CDNX1023.991.62
DJIA17098.4518.88
Nasdaq4580.271+22.577
S&P 5002003.37+6.63
CDN Dollar0.9199+0.0005
Gold1281.70-2.1001
Oil95.96+1.29
Lumber349.60+2.60
Natural Gas3.965+0.054

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.190.00
Cantex0.08+0.01
Anavex Life Sciences0.25+0.01
Metalex Ventures0.0750.00
Russel Metals36.48+0.09
Copper Mountain Mining2.93+0.02
Colorado Resources0.180.00
ReliaBrand Inc0.10+0.001
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.245-0.005

 



21313

FEATURED Property
20182003809 Sonoma Pines Drive west kelowna bc
$357,900
more details
image2
Click here to feature your property
Please wait... loading


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...

_








Member of BC Press Council


22810