Reynolds American Results Surge

Reynolds American Inc. on Thursday reported better-than-expected revenue growth in its latest quarter, driven by last year's acquisition of the Newport cigarette brand, but offered a 2016 earnings forecast that fell mostly below Wall Street expectations.

Reynolds American has seen growth driven by its $25 billion acquisition of Lorillard, which makes the Newport cigarette brand.

Chief Executive Susan Cameron said Reynolds has entered 2016 with "significant momentum."

Reynolds, the nation's second-largest tobacco company behind Altria Group Inc., forecast earnings of $2.25 to $2.35 in 2016, while analysts had forecast $2.34 in earnings.

The company also said it has lifted its quarterly dividend by 17%.

For the fourth quarter, Reynolds said higher pricing and the inclusion of Newport helped the company deliver a profit of $279 million, or 19 cents a share, up from $148 million, or 14 cents a share.

Excluding special items, per-share earnings were 48 cents. Analysts had forecast 50 cents a share in earnings.

Overall sales rose to $3.05 billion from $2.13 billion a year earlier. Analysts polled by Thomson Reuters had expected $3.04 billion in revenue.

At its RJR Tobacco unit, which includes Camel, Pall Mall and Newport, volume surged 34.6% from the prior year because of the inclusion of Newport. That offset a 2% decline in volume for Camel and a 3.5% decline at Pall Mall.

RJR's market share, on a pro forma basis, was flat at 31.8%, though Newport's market share ticked up to 13.6% from 13%.

Last month, rival Altria Group reported profit and revenue for the fourth quarter that missed Wall Street expectations as cigarette shipments slipped. The company announced it would cut roughly 5% of its workforce.

Write to Chelsey Dulaney at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 08:55 ET (13:55 GMT)

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