RICHMOND, Va. (AP) — Reynolds American Inc. said Tuesday that its profit rose by 6.7 percent in its second quarter as higher cigarette and smokeless tobacco prices helped to offset a decline in the number of cigarettes it sold.
The Winston Salem, North Carolina-based company said it earned $492 million, or 92 cents per share, in the period ended June 30, up from $461 million, or 84 cents per share, a year ago.
Adjusted earnings were 89 cents per share, topping analyst estimates of 87 cents per share, according to Zacks Investment Research.
The nation's second-biggest tobacco company reported revenue, excluding excise taxes, of $2.16 billion, down from $2.18 billion a year ago. Wall Street predicted $2.22 billion in revenue.
Its shares rose 28 cents to $56.95 in early trading Tuesday.
Earlier this month, Reynolds announced plans to buy Newport cigarette maker Lorillard Inc. for $25 billion. The tie-up would create a formidable No. 2 tobacco company in the U.S. behind Richmond, Virginia-based Altria Group Inc. It also creates a powerhouse in menthol cigarettes, which are becoming a bigger part of the business and gives the combined company some breathing room even as people smoke fewer cigarettes every year.
The maker of Camel and Pall Mall cigarettes said its R.J. Reynolds Tobacco subsidiary shipped 8 percent less cigarettes during the quarter, compared with an estimated decline of 5.5 percent for the industry as a whole.
Volumes for Camel fell more than 4 percent and volumes for Pall Mall decreased 6 percent. The brands account for more than 60 percent of the company's total cigarette volume.
Continue reading this story on the...