Reynolds American 2Q Revenue Increased by 4%

August 6th, 2013 00:00

Reynolds American declared this week that its 2Q revenue boosted 4 % as larger prices and lower costs from a historical legal settlement compensated a fall in tobacco sales. The holder of the world's second giant cigarette company gained $461 million, or 84 cents per share, for the quarter concluded June 30, upward from $443 million, or 78 cents per share in 2012.

Reynolds American

The manufacturer of Camel, Pall Mall and Winston cigarettes mentioned profits not including excise taxes were basically flat at $2.18 billion. The continuous poor economy, increased unemployment and larger retail prices keep on to affect consumers' wallets, CEO Daniel Delen stated in a conference with investors. He also mentioned that increase in smokeless tobacco products and electronic cigarettes are damaging cigarette sales. The amount of cigarettes sold by its R.J. Reynolds Tobacco branch dropped 6 % during the quarter to about 17 billion cigarettes. When adapting for trade inventory differences, the company reports that industry cigarette volumes dropped by 4.3 %.

Volumes for Camel and Pall Mall each dropped less than 1 %. The brands make up above 60 % of Reynolds American's full cigarette volume. Shipments of its other cigarette brands, that comprise Winston, Kool, Camel and Pall Mall, dropped 15 %. Camel's market share raised 0.4 percentage points to 8.7 % of the U.S. market, whilst Pall Mall's market share increased 8.9 %. The company has advertised Pall Mall as the most affordable qualitative smoking product, an ideal variant for those smokers who are affected by poor economy and high unemployment, and has reported that half the people who ever light up this brand keep on smoking it.

Reynolds American and other cigarettes companies are also paying attention on tobacco alternatives like snuff and chewing tobacco for long term sales growth as tax boosts and numerous smoking bans make the cigarette business more challenging. Volume for its smokeless tobacco brands like Grizzly and Kodiak increased over 9 % in comparison to previous year. The brands accounted for 33 % share of the U.S. retail market, which even can't be compared with regular cigarettes.

Latest News