Reynolds 3Q Revenue Fall 4%
Reynolds Cigarette Company, the world’s second largest cigarette company, declared these days that its 3Q profit dropped about 4%.
But the manufacturer of Camel and Pall Mall cigarette brands announced that its earnings except those products raised approximately 4% as higher prices, increase in efficiency and selling more of its smokeless brands like Grizzly and Kodiak postpone cigarette volume decreases.
The company continues to pay attention on delivering persistent growth,” even tacking into account the difficult economic and competitive tobacco market,” CEO Daniel M. Delen stated in an interview.
Reynolds based in Winston-Salem, declared that its net profit dropped to $367 million, or 63 cents per share, which is lower than $381 million, or 65 cents per share, registered a year ago.
Earnings adjusted for the charges related to several claims in lawsuits from smokers affected by their cigarette use and other costs constituted 70 cents per share. Analyst expected at least 73 cents per share.
Profit excluding excise duties decreased about 2 % to $2.2 billion from $2.24 billion, but surpassed the analysts’ estimates of $2.16 billion.
The company also increased its quarterly dividend by 5.7 %. Its shares remained unchanged at $39.37 in premarket trading.
Reynolds declared that it sold less than 6.8% of cigarettes in comparison to last year’s quarter. The total decline of the industry constituted 6.4%.
US tobacco companies warned last quarter that the 3Q cigarette volume and profitability rate would be affected because retailer reserved more than usual in that period last year.
Reynolds sold less than 1% of its Camel brand and the sales volume of Pall Mall increased about 2%.
For instance Camel’s market share didn’t change and at remaining at 7.9% of the US market, while Pall Mall’s market share increased 0.7 % to 8.6 %.
The company has advertised Pall Mall brand as a long-lasting, full–flavored cigarette brand that has a very affordable price, which is a best variant for those who want to smoke something qualitative and at the same time lower priced.
Reynolds as well as other tobacco companies is paying attention to various cigarette alternatives as for instance snuff and chewing tobacco for future sales growth as the increasing taxes and wide-spreading smoking bans make cigarette business tougher.
The company already sold 7% of its smokeless tobacco products and the share of the given segment increased 1.1% to 31.6%.
Recently Reynolds declared that its board of directors approbated an increase in the quarterly dividend of 3 cents per share, or 5.7 %, to 56 cents a share. The given dividend should be paid till January 3.
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