WINSTON SALEM, N.C. (AP) — Reynolds American’s third quarter results missed Wall Street’s view as cigarette volumes declined.
The parent of Camel and Pall Mall cigarette maker R.J. Reynolds also announced a succession plan on Wednesday that will see current president and CEO Susan Cameron become executive chairman at the start of the new year. Debra Crew, president and chief operating officer of subsidiary R.J. Reynolds Tobacco Co., was named president- and CEO-elect. She will become president and CEO of Reynolds American, as well as a board member, on Jan. 1, 2017.
Reynolds American said that Cameron will serve as executive chairman until May 2017. At that point she is expected to become non-executive chairman.
Reynolds American Inc. shares dropped more than 5 percent in morning trading Wednesday.
For the three months ended Sept. 30, Reynolds American earned $861 million, or 60 cents per share. A year earlier the Winston Salem, North Carolina-based company earned $657 million, or 46 cents per share.
Earnings, adjusted for one-time costs, were 61 cents per share. That’s short of the 64 cents per share that analysts surveyed by Zacks Investment Research predicted.
Revenue rose to $3.21 billion from $3.16 billion, but analysts forecast higher revenue of $3.36 billion, according to a Zacks poll.
Domestic cigarette volumes for operating companies declined 1.5 percent from a year earlier, while industry cigarette volume fell 1.6 percent.
Reynolds American Inc. now anticipates full-year adjusted earnings in a range of $2.27 to $2.33 per share. Its prior guidance was for earnings between $2.26 and $2.34 per share. Analysts polled by FactSet expect full-year earnings of $2.32 per share.
Shares of Reynolds American dropped $2.66, or 5.6 percent, to $44.61 in morning trading after trading as low as $43.38. Its shares are down more than 5 percent over the past year.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on RAI at http://www.zacks.com/ap/RAI
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