Reynolds' Volumes Down But Share Holds Up

Source from:  Tobacco Reporter 04/27/2011

R.J. Reynolds' domestic-market cigarette volume during the first quarter of 2011, at 17.2 billion, was down by 5.2 per cent on that of the first quarter of last year. Total growth brand volume was up by 7.7 per cent to 9.8 billion, driven mainly by a 16.0 per cent increase to 5.1 billion in sales of Pall Mall. Sales of Camel filter versions, at 4.7 billion, were said to have increased by 0.1 per cent. Support brand sales were down by 13.9 per cent to 6.6 billion, while non-support brand sales were down by 43.0 per cent to 0.8 billion. Reynolds' share of the US retail market, at 27.9 per cent was unchanged. The share of its growth brands was said to have been increased by 2.7 percentage points to 16.3 per cent, while the share of its support brands was down by 1.4 percentage points to 10.5 per cent and the share of its non-support brands was down by 1.3 percentage points to 1.1 per cent. Reynolds' cigarette market performance was reported by Reynolds American Inc, which also reported American Snuff's figures. Sales of American's moist snuff cans during the first quarter of 2011, at 97.0 million cans, were increased by 13.2 per cent on those of the first quarter of last year. Sales of Grizzly were up by 17.1 per cent to 85.0 million, while sales of Kodiak were down by 5.8 per cent to 11.2 million and sales of other brands were down by 30.0 per cent to 0.8 million. American's share of the US market, at 31.1 per cent, was up by 1.3 percentage points. Grizzly's market share was up by 1.5 percentage points to 27.1 per cent, while Kodiak's share was down by 0.2 of a percentage point to 3.8 per cent and other brands' share was down by about 0.1 of a percentage point to 0.2 per cent. RAI's reported operating income during the first quarter of 2011, at $577 million, was increased by 1.2 per cent on that of the first quarter of last year. Adjusted operating income was up by 3.3 per cent to $589 million. Reported net income was up by 330.5 per cent to $353 million, and adjusted net income increased by 5.8 per cent to $344 million. Reported net income excluded special items that include 2010 charges related to changes in US federal health-care laws, settlements with the Canadian governments, and implementation costs related to plant closings and tax items. Reported net income per diluted share was up by 328.6 per cent to $0.60, and adjusted net income per diluted share was increased by 5.4 per cent to $0.59. "RAI has made a solid start to the year, delivering higher first-quarter earnings driven by continued momentum in its operating companies' key brands," said Daniel M. Delen, who became RAI's president and CEO on March 1. "With further improvements in productivity also contributing to the bottom line, I'm pleased to reaffirm today our projections for full-year adjusted EPS growth in the mid- to high-single digits." Meanwhile, RAI's Santa Fe Natural Tobacco Co subsidiary was said also to have generated strong first-quarter results, with higher volume, share and earnings. "Our operating companies continue to demonstrate the positive impact of their successful business strategies despite a challenging environment," Delen added. "As a result, they are strengthening marketplace and financial performance, while focusing on innovations to continue the transformation of the business. This positions us well for long-term growth." Enditem