Reynolds Profit Up but Weakness Ahead
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R.J. Reynolds Tobacco Holdings Inc. reported a slight rise in second-quarter profit but said third-quarter results would miss Wall Street expectations.
The Winston-Salem, N.C.-based company said operating profit edged up 2% to $211 million, or $2.29 a share, beating analysts’ average estimate of $2.27, with help from its acquisition of Santa Fe Natural Tobacco Co.
Revenue was flat at $1.7 billion as steep increases in cigarette prices offset lower volume and higher promotional costs.
RJR said it expects third-quarter earnings of $2.20 to $2.30 a share, compared with analysts’ forecast of $2.32, because it anticipates continued declines in U.S. shipments.
Shares of RJR fell 93 cents to $51.05 on the NYSE.
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