Reynolds’ volumes down but share holds up

R.J. Reynolds’ domestic-market cigarette volume of 17.2 billion was down by 5.2 % during the first quarter of 2011.

Total growth brand volume reached 7.7 % to 9.8 billion, resulting from a 16.0 % increase to 5.1 billion in sales of Pall Mall. Sales of Camel cigarettes with filter increased at 4.7 billion by 0.1 %.

Reynolds American Inc

Reynolds American Inc

Support brand sales reduced by 13.9 % to 6.6 billion and non-support brand sales reduced by 43.0 % to 0.8 billion.

Reynolds’ share of the US retail market, at 27.9 per cent remained unaltered. The share of its growth brands has been increased by 2.7 percentage points to 16.3 %, while the share of its support brands reduced by 1.4 percentage points to 10.5 % and the share of its non-support brands reduced by 1.3 percentage points to 1.1 %.

Reynolds American Inc reported Reynolds’ cigarette market performance.

Sales of American’s moist snuff cans during the first quarter of 2011, at 97.0 million cans, were up by 13.2 % on those of the first quarter of 2010.

Sales of Grizzly were increased by 17.1 % to 85.0 million, and sales of Kodiak were reduced by 5.8 % to 11.2 million and sales of other brands were reduced by 30.0 % to 0.8 million.

American’s share of the US market, at 31.1 %, was increased by 1.3 percentage points. Market share of Grizzly was increased by 1.5 percentage points to 27.1 %, and Kodiak’s share was reduced by 0.2 of a percentage point to 3.8 % and other brands’ share was reduced by approximately 0.1 of a percentage point to 0.2 %.

RAI’s operating profit during the first quarter of 2011, at $577 million, was up by 1.2 % on that of the first quarter of 2010. Established operating income was increased by 3.3 % to $589 million.

Reported net income was increased by 330.5 % to $353 million, and established net income was up by 5.8 % to $344 million. Reported net income did not include special items that include 2010 charges related to changes in US federal health-care laws, settlements with the Canadian governments, and implementation costs concerning plant closings and tax items.

Reported net income per diluted share was increased by 328.6 % to $0.60, and adjusted net income per diluted share was up by 5.4 % to $0.59.

Daniel M. Delen, who became RAI’s president and CEO on March 1, declared that RAI has started successfully, delivering higher first-quarter earnings resulting from continued momentum in its operating companies’ main brands.

At the same time, RAI’s Santa Fe Natural Tobacco Co subsidiary had generated strong first-quarter results with higher volume, share and earnings.

Delen said that their operating companies keep on demonstrating the good results of their successful business strategies regardless of a challenging environment.

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