Big Tobacco Takes Financial Hit

Source from:  Wednesday, Jul 25, 2007 By NBC17 CHARLOTTE, N.C. (AP) 07/26/2007

Reynolds American Inc., the nation's second-largest tobacco company, said Wednesday its second-quarter profit fell nearly 14 percent in part due to tax gains that fattened results a year ago. Discuss This Story The Winston-Salem, N.C. based maker of Camel and Kool cigarettes earned $325 million, or $1.10 per share, in the three months ended June 30 versus $376 million, or $1.27 per share, in the year ago period. Revenue edged up 2.6 percent to $2.35 billion from $2.29 billion in the previous year. Analysts expected earnings of $1.21 per share on sales of $2.3 billion of sales, according to a survey by Thomson Financial. The earnings estimates typically exclude one-time items. "Reynolds American's first-half results position us well to deliver strong earnings growth for the full year," said Susan M. Ivey, Reynolds American's chief executive. Ivey said company's financial strength in the first half was clouded by comparisons to a particularly strong prior-year period that benefited from $74 million of extraordinary tax gains. In the second quarter of 2006, an extra shipping day, an increase in orders ahead of the July 4 holiday and the company's implementation of a new systems platform all increased shipments, adding to the decline in the most recent quarter. Reynolds American also said Wednesday it raised its quarterly cash dividend by 13.3 percent to 85 cents per share, or $3.40 on an annualized basis. The dividend is payable Oct. 1 to shareholders of record on Sept. 10. Enditem