DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
A-Brands

Reynolds Misses Profit Estimates, Hurt By Takeover Expenses

By Steve Wynne-Jones
Share this article
Reynolds Misses Profit Estimates, Hurt By Takeover Expenses

Reynolds American Inc., the No. 2 seller of tobacco in the U.S., posted second-quarter profit that missed analysts’ estimates, hurt by lower cigarette sales volumes and increased acquisition-related interest expenses.

Earnings were 58 cents a share, excluding some items, the Winston-Salem, North Carolina-based company said in a statement on Tuesday. Analysts estimated 61 cents, on average. Sales excluding excise taxes rose 33 percent to $3.2 billion, trailing analysts’ $3.26 billion average projection.

Reynolds completed its $25.9 billion acquisition of Lorillard Inc. a little over a year ago, giving it control of the Newport menthol cigarette brand. Newport added 0.5 percentage points of retail market share from a year earlier. But deal-related costs and an increased number of common shares weighed on earnings per share.

The Camel cigarette maker also narrowed estimated range for full-year 2016 earnings per share to $2.26 to $2.34 from $2.25 to $2.35 and announced a $2 billion buyback program.

The shares fell 1.8 percent to $51.36 at 9:39 a.m. in New York. The stock gained 13 percent this year through Monday.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

ADVERTISEMENT
Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.