RICHMOND, Va. (AP) — Reynolds American Inc.'s first-quarter profit fell more than 28 percent as the company sold fewer cigarettes and spent more on expanding its electronic cigarette brand and legal costs.
The nation's second-biggest tobacco company on Wednesday reported earnings of $363 million, or 67 cents per share, for the quarter ended March. 31. That's down from $508 million, or 92 cents per share, a year earlier.
Adjusted earnings were 72 cents per share, missing Wall Street estimates by 2 cents.
The Winston-Salem, N.C., maker of Camel and Pall Mall cigarettes said revenue excluding excise taxes increased nearly 3 percent to $1.93 billion. Analysts polled by FactSet expected $1.91 billion.
The company said its R.J. Reynolds Tobacco subsidiary sold 14.3 billion cigarettes, a decline of about 4 percent, compared with a estimated decline of about 3 percent for the industry as a whole.
Volumes for Camel grew 2.5 percent and volumes for Pall Mall were flat. The brands account for more than 60 percent of the company's total cigarette volume. Shipments of its other brands, which include Winston, Kool, Doral and Salem, fell about 13 percent.
Camel's market share increased 0.4 percentage points to 10 percent of the U.S. market, while Pall Mall's market share grew 0.3 percentage points to 9.5 percent.
The company has promoted Pall Mall as a longer-lasting and more affordable cigarette as smokers weather the weak economy and high unemployment.
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