RICHMOND, Va. (AP) — Reynolds American Inc.'s fourth-quarter profit more than doubled as higher prices and lower legal expenses offset a decline in cigarette sales, and it benefited from an easy comparison with last year.
The results from the nation's second-biggest tobacco company Tuesday missed Wall Street expectations, however, and its shares dipped in morning trading.
The maker of Camel and Pall Mall cigarettes said the number of cigarettes sold by its R.J. Reynolds Tobacco subsidiary fell about 9 percent during the quarter to 15.6 billion.
Reynolds American and other tobacco companies are also focusing on cigarette alternatives such as snuff, chewing tobacco and electronic cigarettes as tax hikes, smoking bans, health concerns and social stigma make the cigarette business tougher.
When adjusting for trade inventory changes, the Winston-Salem, N.C.-based company said its cigarette volumes fell 7 percent, compared with its estimated industry decline of 4 percent.
Volumes for Pall Mall fell more than 6 percent and volumes for Camel fell 3.5 percent. 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 15 percent.
Camel's market share increased 0.4 percentage points to 9 percent of the U.S. market, while Pall Mall's market share grew 0.2 percentage points to 9.1 percent.
The company has promoted Pall Mall as a longer-lasting and more affordable cigarette as smokers weather the weak economy and high unemployment.