Reynolds American 2Q Profit Slips 11% On Cigarette Volume Decline

Reynolds American Inc.'s (RAI) second-quarter earnings slipped 11% on a litigation charge and as a decline in cigarette sale volumes offset higher pricing and volume gains in moist snuff.

Looking ahead, the company raised the low end of its forecast for full-year per-share earnings by 2 cents, estimating $2.62 to $2.70 a share.

The company has in recent years shifted its focus to a few key brands and consolidated production. As cigarette smoking continues to decline, the company has diversified into other offerings, like smokeless tobacco.

Reynolds reported a profit of $304 million, or 52 cents a share, down from $341 million, or 58 cents a share, a year earlier. Excluding litigation charges and implementation costs, adjusted earnings rose to 67 cents a share from 66 cents. Net sales edged up 1% to $2.3 billion.

Analysts polled by Thomson Reuters had expected earnings of 71 cents a share on $2.27 billion.

The R.J. Reynolds Tobacco division's top line rose 0.7%. Total R.J. Reynolds domestic volume fell 4.4%. Total market share, excluding private label brands, was unchanged from a year ago.

At the American Snuff unit, which makes Grizzly- and Kodiak-brand moist snuff, revenue fell 16%. Volume rose 3.6%.

Shares of Reynolds were recently off 1% to $38.13 in premarket trading. Through the latest close, the stock is up 18% since the start of the year.

Electronic cigarette company offers kits to public at wholesale price

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