Reynolds American Inc. (RAI) is one of the leading manufacturer and seller of cigarettes and smokeless tobacco products in U.S. and owns popular brands like Camel and Pall Mall.
Reynolds has seen soft cigarette shipment volume trends for the past few quarters, due to a general shift away from tobacco products resulting from accelerating prices of cigarettes and worldwide anti-tobacco campaigns. The company is thus putting greater focus on the growing electronic cigarettes to boost sales. Reynolds completed its second phase of nationwide expansion of its e-cigarette brand Vuse in Oct 2014 which affected sales positively. The pending merger between Reynolds and Lorillard Inc. has received favorable response from the shareholders of both the companies. Due to this, investors are eagerly awaiting XYZ’s earnings report in order to set the record straight and to give guidance for the company’s outlook.
Investors should also note that earnings estimate for RAI has been revised upward during the last 30 days. RAI has a mixed history when it comes to recent earnings reports as the stock has posted positive surprise in two of the last four quarters and negative surprise for the other two, with an average negative surprise of 0.24%.
Currently, RAI has a Zacks Rank #2 (Buy), but that could definitely change following Reynolds’ earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: RAI posts in line on earnings. Our consensus earnings estimate called for EPS of $0.87/share, and the company’s reported EPS was same. Investors should note that these figures take out stock option expenses.
Revenues: RAI reported revenues of $2.13 billion. This missed our consensus estimate of $2.14 billion.
Key Stats to Note: Operating Income increased 7.9% to $780 million.
Stock Price: Inactive in pre-market trading
Check back later for our full write up on this RAI earnings report later.
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