Reynolds American Meets Forecasts on Higher Profit

But cigarette volume declined compared to last year

By Christopher Freeburn, InvestorPlace Writer

Reynolds American (NYSE:RAI) announced on Tuesday that it earned $420 million during the third quarter, up almost 7% from $394 million in the same period last year. Adjusted EPS was 79 cents, which met Wall Street expectations, the Associated Press noted.

The cigarette-maker recorded revenue, excluding excise taxes, of $2.12 billion, down about 4% from $2.2 billion in 2011.That fell short of the $2.18 billion anticipated by analysts.

Investors: Stop Bogarting Tobacco Stocks
Investors: Stop Bogarting Tobacco Stocks

Investors weren’t impressed. Shares of Reynolds American fell almost 2% in Tuesday afternoon trading.

The company reiterated its previously issued earnings guidance for the year, predicting a profit of between $2.91 and $3.01 a share.

Company officials said volume dropped to 17.4 billion cigarettes, down 7% compared to last year. Industrywide cigarette volumes dipped 2.7% over last year.

Last week, Philip Morris International (NYSE:PM) reported lower third-quarter earnings and revenue that missed Wall Street estimates.

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