Reynolds Sales Climb As Higher Cigarette Pricing Offsets Lower Volumes

Tobacco company Reynolds American Inc. said Tuesday it had net income of $148 million, or 28 cents a share, in the fourth quarter, down from $292 million, or 54 cents a share, in the year-earlier period. Adjusted per-share earnings which exclude charges for pensions and other retirement adjustments as well as transaction-related costs, came to 87 cents, matching the FactSet consensus. Sales rose to $2.134 billion from $2.039 billion, compared with the FactSet consensus of $2.137 billion. The company, which is acquiring Lorillard Inc., said higher cigarette and moist-snuff pricing helped offset lower cigarette volume and investment in its VUSE digital vapor. Reynolds now expects 2014 adjusted per-share earnings of $3.65 to $3.80, compared with the current FactSet consensus of $3.79. Shares were not yet active in premarket trade, but have gained 4.6% in the last three months, while the S&P 500 has gained 0.4%.