Investors Eye Earnings In High-Yield Tobacco Space

Source from:  Yahoo Finance 10/22/2010

Tobacco stocks are some of Wall Street's favorite "defensive" equity sectors, and two large-cap players announced their quarterly results before the bell on Thursday. Philip Morris International (NYSE: PM - News) posted net income of $1.82 billion, or 99 cents per share, compared to $1.79 billion, or 93 cents per share, in Q3 of 2009. Excluding certain items, the company's adjusted EPS came to an even dollar, a penny below analyst consensus. Excluding excise taxes, revenue rose fractionally to $6.6 billion, which was also below Wall Street's $6.98 billion expectations. The firm hiked its full-year earnings guidance to between $3.90 and $3.95 per share. Elsewhere, Reynolds American (NYSE: RAI - News) posted third-quarter profits of $381 million, or $1.30 per share, compared to $362 million, or $1.24 per share in the same period last year. Excluding one-time items, the firm's adjusted EPS came to $1.35, a penny better than analysts were expecting. Revenue was up by 4% to $2.24 billion, excluding excise taxes, which was slightly higher than the Street's $2.2 billion outlook. Reynolds American increased its full-year earnings guidance to between $4.95 and $5.05 per share. Analysts are looking for $4.98 in 2010 EPS. As a whole, the Tobacco and Tobacco Product Stocks Index is ahead fractionally today, but Philip Morris and Reynolds American are in negative territory on the day. However, both are helping boost the Index's average 4% yield. Last week, Reynolds American announced that it will split shares two-for-one, and boost its split-adjusted quarterly dividend to 49 cents per share, bringing the stock's annual yield to just under 6.3%. Elsewhere in the sector, discount tobacco firm Vector Group (NYSE: VGR - News) boasts an 8% yield, while Altria (NYSE: MO - News), Lorillard (NYSE: LO - News), and Universal (NYSE: UVV - News) yield upwards of 4%. For more on these stocks, and the full list of tickerspy's highest yielding Indexes visit tickerspy.com. Fun and informative, tickerspy.com is a free investing website where you can track multiple stock portfolios and compare against 250 proprietary Indexes tracking themes from dividends to ETFs to green energy to precious metals. Best of all, tickerspy.com lets you spy on the portfolios of nearly 3,000 Wall Street institutions and hedge funds and see graphs of their performance. Try tickerspy.com today and find out how you stack up against investing legends like Warren Buffett! Enditem