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 nationwide expansion of its e-cigarette brand Vuse 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 Reynold’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 three of the last four quarters and negative surprise in one, with an average positive surprise of 1.00%.
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 higher than expected earnings. Our consensus earnings estimate called for EPS of $0.79/share, and the company’s reported EPS was $0.86/share. Investors should note that these figures take out stock option expenses.
Revenues: RAI reported revenues of $2.05 billion. This beat our consensus estimate of $1.98 billion.
Key Stats to Note: Operating Income increased 6.3% year over year.
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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