Sunday, October 19th8.5°C
23836
22924

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

23041


Recent Trending




Today's Market
S&P TSX14227.68+174.71
S&P CDNX810.1318.20
DJIA16380.41263.17
Nasdaq4258.438+41.047
S&P 5001886.76+24.00
CDN Dollar0.8874+0.0009
Gold1236.20-2.80
Oil81.62+0.38
Lumber334.60-0.60
Natural Gas3.766-0.036

 
Okanagan Companies
Pacific Safety0.10-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.11+0.06
Cantex0.08+0.02
Anavex Life Sciences0.19-0.0015
Metalex Ventures0.05+0.005
Russel Metals32.35+0.87
Copper Mountain Mining1.94+0.09
Colorado Resources0.15+0.005
ReliaBrand Inc0.013-0.0028
Sunrise Resources Ltd0.060.00
Mission Ready Services0.45+0.06

 
23806


23616

FEATURED Property
20168831586 Marina Way
3 bedrooms 3 baths
$749,999
more details
image2image2image2
Click here to feature your property
Please wait... loading


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...


Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...

_



23545




Member of BC Press Council


23741