US
Reynolds American, based in The Winston Salem, NC, recently reported strong second-quarter profit with cigarette prices and volume rising. The second-largest tobacco company in the country topped analysts’ expectations, boosted its profits and dividends and announced a 2-for-1 stock split.
Its net income skyrocketed to US$1.93 billion, or US$3.38 per share. Earnings, adjusted for non-recurring gains, came to US$1.02 per share, 8% better than Wall Street had expected, according to a poll by Zacks Investment Research.
The parent company of Camel and Pall Mall cigarette maker R.J. Reynolds posted an 11.1% jump in revenue to US$2.4 billion in the period. It recently closed on a US$25 billion takeover of Newport seller Lorillard Inc. Cigarette sales volumes also rose 5.6% and the quarter included an impressive gain on a divestment that was part of the Lorillard deal. The company now expects full-year earnings in the range of US$1.90-2.00 per share, up from prior guidance of US$1.83-1.90.
Reynolds is raising its dividend 7.5% to US$1.44 annually after the stock split.
Shares of Reynolds American Inc. have increased 23% since the beginning of the year, while the Standard & Poor’s 500 index has stayed nearly flat. The stock has climbed 39% in the last 12 months.