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Reynolds American (RAI) Q4 Profit Tops Street, Cigarette Volumes Down

 February 12, 2013 07:35 AM
 


(By Balachander S) Reynolds American Inc. (NYSE: RAI) reported a fall in quarterly earnings citing a drop in cigarette volumes. Adjusted results, however, beat Wall Street projections and the tobacco company issued 2013 forecast above consensus.

Adjusted earnings per share (EPS) increased 5.6 percent to 76 cents from 72 cents, topping market expectations of 73 cents. On a GAAP basis, net income dropped 54 percent to $139 million as asset impairment charges and adjustments weighed on results.

Net sales was nearly flat at $2.08 billion, versus consensus estimate of $2.06 billion for the fourth quarter.

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Adjusted operating margin shrank 0.6 percentage points to 33.1 percent.

Fourth-quarter shipments fell 2.7 percent. Industry volume decreased 0.8 percent in the three-month period.

Looking ahead for the full year 2013, the company expects adjusted EPS in the range of $3.15 to $3.30, while analysts expect $3.12. The outlook reflects the favorable impact of the recent agreement on the partial resolution of the Master Settlement Agreement NPM disputes related to the 2013 volume year, the company said.

RAI shares, which have been trading between $39.45 and $46.93 over the past year, closed Monday's regular trading at $44.22.

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