Reynolds American Q1 Adj. Profit Meets View; Reiterates 2016 Outlook

(RTTNews) - Reynolds American Inc. (RAI) reported a surge in profit for the first quarter from last year on strong revenue growth and a one-time gain. Adjusted earnings per share for the quarter matched analysts' estimates.

The company's first-quarter net income rose to $3.57 billion or $2.49 per share from $389 million or $0.36 per share in the prior-year quarter.

The increase in profit was driven primarily by a gain on divestiture related to the sale of Natural American Spirit's business outside the U.S., as well as higher pricing and volumes on both cigarettes and moist snuff.

Excluding items, adjusted earnings per share for the quarter were $0.50, compared to last year's $0.43. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 41.8 percent to $2.92 billion from $2.06 billion in the same quarter last year. Analysts expected revenue of $2.93 billion for the quarter.

Looking ahead to fiscal 2016, Reynolds American reiterated its forecast for adjusted earnings per share in a range of $2.25 to $2.35, up 13.6 percent to 18.7 percent from 2015. The Street expects the company to earn $2.35 per share for the year.

Reynolds American CEO Susan Cameron will remain with company to complete the Lorillard integration and succession planning.