Last News

Reynolds American's revenue drops on higher costs

February 11th, 2015 00:00

Cigarette manufacturer Reynolds American Inc.'s fourth-quarter revenue dropped 49% on pension costs and other expenses before the closing of its intended $25 billion takeover of Newport owner Lorillard Inc.

The country's second-largest cigarette maker on Feb. 10 that it gained $148 million, or 28 per share, in the period completed Dec. 31, in contrast to $292 million, or 54 cents per share, last year.

Pall Mall Premium Blend

Reynolds American said its income excluding excise taxes boosted 5% to $2.13 billion on higher cigarette and smokeless tobacco prices, corresponding expert estimates.

The company also explained that it continues to be assured its deal with Lorillard will complete in the first half of the year. The merger, declared in July, would gather two of the country's oldest and greatest cigarette makers, making a powerful No. 2 to Altria Group Inc., proprietor of Philip Morris USA. Reynolds American shares went up $1.61, or 2.4%, to $70.06 in morning trading.

The maker of Camel and Pall Mall cigarettes said the amount of cigarettes sold by its R.J. Reynolds Tobacco branch went down about 5% during the quarter to 14.9 billion, in contrast to an industry decrease of 2%.

Amounts for Pall Mall dropped about 5% and volumes for Camel decreased less than 1%. The brands represent almost 75% of the company's total cigarette volume.

The market share of Camel gone up 0.3 percentage points to 10.3% of the U.S. market, while Pall Mall's market share fell 0.2 percentage points to 9.3%.

The volume of Natural American Spirit cigarettes it sold increased 1 % to about 1.1 billion cigarettes.

For the full year, the company said its revenue fell into more than 14% to $1.47 billion. Earnings excluding excise taxes went up about 3% to $8.47 billion. Cigarette shipments decreased 5% to 61 billion cigarettes.