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Reynolds American (RAI) Tops Q3 EPS by 4c

October 21, 2014 7:04 AM EDT

Reynolds American (NYSE: RAI) reported Q3 EPS of $0.95, $0.04 better than the analyst estimate of $0.91. Revenue for the quarter came in at $2.24 billion versus the consensus estimate of $2.2 billion.

Reynolds American reaffirmed FY2014 guidance.

“I’m very pleased to report another strong performance by our operating companies, which drove Reynolds American’s earnings and margin higher in the third quarter,” said Susan M. Cameron, president and chief executive officer of RAI. “All of our reportable business segments increased both profit and margin during the quarter, while they continued to enhance their powerful key brands.”

In addition, management’s focus on building long-term sustainability as part of the company’s transforming tobacco strategy gained further momentum in the third quarter, with promising results from the national roll-out of innovative nicotine-based products.

“The expansion of R.J. Reynolds Vapor Company’s VUSE Digital Vapor Cigarette is going very well,” Cameron said. “VUSE will be available in almost 70,000 selected retail outlets by early next week, and that will be followed by another wave of expansion early next year.” Niconovum USA began national distribution of its ZONNIC gum, a nicotine-replacement therapy product, in September. “I’m pleased to say that early results are positive, with strong interest from retailers and smokers,” Cameron said. “ZONNIC is expected to be in about 8,000 selected outlets by the end of this month, and its retail availability will continue to grow through the rest of the year.”

Another highlight of the quarter was RAI’s selection again to the Dow Jones Sustainability North America Index. “We greatly value this independent recognition of our companies’ wideranging sustainability efforts as it demonstrates our commitment to sustainability across all aspects of our business,” she said.

“Our results demonstrate the substantial progress we’ve made this year in strengthening our core businesses and returning value to our shareholders, and our companies continue to enhance their prospects for long-term growth,” Cameron said.

Cameron said that RAI continues to diligently work to obtain the necessary regulatory, shareholder and other approvals for the company’s proposed acquisition of Lorillard, Inc. and divestiture of select brands and assets to a subsidiary of Imperial Tobacco Group PLC (“the Proposed Transaction/s”).

“RAI is currently responding to a second request for additional information from the U.S. Federal Trade Commission, and the company recently filed its preliminary joint proxy statement/prospectus with the U.S. Securities and Exchange Commission,” she said. “This process is proceeding smoothly, and we remain confident that the transaction will be completed by mid-2015.”

For earnings history and earnings-related data on Reynolds American (RAI) click here.



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