Reynolds American Growth Continues on Newport Acquisition

Reynolds American Inc. on Tuesday reported continued revenue growth in its latest quarter, driven by last year's acquisition of the Newport cigarette brand.

Reynolds American's growth has been helped largely by its $25 billion acquisition of Lorillard, which makes the Newport cigarette brand.

Chief Executive Susan Cameron said Newport's manufacturing integration is progressing smoothly and is now expected to be completed by the middle of this year, well ahead of the initial projection for the end of 2016.

"Newport has delivered impressive market-share gains during this successful transition, and the brand has been a driving force behind our accelerated business performance over the past three quarters," she said.

Ms. Cameron also said she has agreed to remain with Reynolds to see through the full integration of the companies later this year. Her original agreement to return as chief executive in 2014 was scheduled to end April 30, but included the ability to be extended.

For the first quarter, Reynolds said the sale of its American Spirit business outside the U.S. as well as higher pricing and volumes on cigarettes and moist snuff helped the company deliver a profit of $3.57 billion, or $2.49 a share, up from $389 million, or 36 cents a share, a year earlier.

Excluding a gain tied to the sale of Natural American Spirit's business outside the U.S., and charges for debt and financing costs, among other things, per-share earnings rose to 50 cents a share, matching Wall Street's estimate, from 43 cents.

Overall sales climbed 42% to $2.92 billion. Analysts polled by Thomson Reuters were looking for $2.93 billion.

At its RJR Tobacco unit, which includes Camel, Pall Mall and Newport, volume surged 34% from the prior year because of the inclusion of Newport.

RJR's market share, on a pro forma basis, edged up 0.5% to 32%, though Newport's market share ticked up 0.6 percentage points to 14%.

Reynolds, the nation's second-largest tobacco company behind Altria Group Inc., reaffirmed its earnings forecast for 2016.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

April 26, 2016 09:15 ET (13:15 GMT)

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