RJ Reynolds Loses $125 Million In Quarter
R.J. Reynolds Tobacco Holdings Co. on Thursday said it lost $125 million in the third quarter as a result of one-time items but its results from ongoing operations beat expectations in its first full quarter as an independent tobacco company.
The No. 2 U.S. cigarette maker, which was split off from RJR Nabisco this summer to form free-standing food and tobacco companies, said its earnings before special items slid 30 percent to $110 million, or $1.01 per share, from $158 million, or $1.45 per share, in the same period a year ago.
Wall Street had expected it to report a profit of 99 cents per share before special items, according to research firm First Call/Thomson Financial. The company's shares were off 1-11/16 at 21-3/16 in early morning trade.
Reynolds, whose brands include Winston, Salem, Camel and Doral, said its results were hurt by a 9.3 percent drop in industry shipments that followed price increases and by litigation settlement costs stemming from anti-tobacco lawsuits.
After one-time items, including tax-related adjustments to the gain from selling its international tobacco businesses, Reynolds lost $125 million, or $1.15 per share, compared to net income a year ago of $170 million, or $1.56 per share.
Net sales rose 30 percent to $1.99 billion.
Ahead of the opening bell on the New York Stock Exchange, Reynolds shares stood at 22-7/8 after falling 12 percent Wednesday. Tobacco stocks fell sharply in the aftermath of a Florida state appeals court ruling that could expose cigarette makers to billions of dollars in punitive damages in connection with a sweeping class action verdict against them.