British American Tobacco Profit Rises 21 pct in 1st-qtr

Source from:  biz.yahoo.com LONDON (AP) Wednesday May 7 05/08/2008

Rising overseas sales offset declines in US and boost profit at British American Tobacco. British American Tobacco PLC on Wednesday reported a 21 percent jump in first-quarter profit, with rising global sales more than compensating for declining volumes in the United States. The company earned 599 million pounds ($1.18 billion) for the period, up from 495 million pounds in the same period a year ago. Revenue rose 16.4 percent to 6.77 billion pounds ($13.4 billion). Net profit from Reynolds American, in which BAT holds a 42 percent stake, fell 11 percent excluding exceptional items, the company said. "The benefits from higher cigarette pricing was more than offset by a number of factors that lowered volumes, including higher prices, wholesale inventory shifts and continuing weakness in the U.S. economy," the company said. BAT shares rose 2.9 percent to 1,994 pence ($39.34) in trading in London. Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers, said the company had reported "another extremely strong set of numbers." "Not only is the group increasing sales in the emerging economic regions to counterbalance the threats to its traditional marketplaces (and at generally higher prices), it is also looking to use the lower cost wages of such regions," Hunter said. He said BAT's "cost-saving program remains firmly on track" and it benefited from favorable foreign exchange movements. "For the moment at least, the 17 percent earnings growth is comfortably ahead of its own targets," he said. BAT chairman Jan du Plessis commented: "While the normal caveats about not reading too much into any particular quarter still apply, the group's unrivaled spread of business between developed and developing markets should continue to serve shareholders well." Enditem