Reynolds American Profit and Revenue Climb

By Ezequiel Minaya 

Tobacco company Reynolds American Inc., in the process of being bought by British American Tobacco, said its income tripled in the latest quarter as revenue climbed.

Last month, British American reached a deal to take full control of Reynolds American Inc. in a $49.4 billion deal that marks renewed interest among international players in the U.S. tobacco market. On Thursday, Reynolds said it expects the deal to close in its third quarter.

Reynolds holds a 34.3% share of the U.S. cigarette market, trailing only Marlboro maker Altria Group Inc. The deal will give British American brand Kent an opportunity to expand in the U.S., and Reynolds's Newport a chance to grow overseas.

For the three months ended Dec. 31, the company reported a profit of $851 million, or 60 cents a share, up from $279 million, or 19 cents a share, a year earlier. Excluding certain items, earnings per share rose to 62 cents from 48 cents.

All of Reynolds's segments posted sales increases. Total revenue increased 4.3% $3.19 billion. Analysts had projected 60 cents in per-share profit and $3.16 billion in sales, according to Thomson Reuters.

The Newport brand's retail market share rose to 13.9% from 13.7% a year earlier, while Camel rose to 8.2% from 8.1%. As a whole Reynolds's market share rose to 34.3% from 34.2% a year earlier.

Shares of the company rose 1.1% to $61.15 in premarket trading.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

February 09, 2017 09:09 ET (14:09 GMT)

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