Reynolds American Q1 Profit Soars On Gains, Boosts 2015 Outlook, Dividend

(RTTNews) - Reynolds American Inc. (RAI), which acquired Lorillard, Inc., reported that second-quarter net income soared to $1.93 billion or $3.38 per share from $492 million or $0.92 per share in the prior-year quarter, driven by the $2.57 per share gain on the divestiture to ITG Brands.

Excluding items, adjusted earnings per share was $1.02, compared to last year's $0.89. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.97 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 11.1 percent to $2.40 billion from $2.16 billion in the same quarter last year. Analysts expected revenue of $2.44 billion for the quarter.

Looking ahead to fiscal 2015, the company raised adjusted earnings guidance to a range of $1.90 to $2.00 per share, on a split-adjusted basis, from a prior split-adjusted range of $1.83 to $1.90 per share. The company said it expects to narrow the guidance range with the reporting of its third-quarter results after further assessing its new business dynamics following the acquisition. Analysts expect the company to report full-year 2015 earnings of $3.91 per share.

On Monday, RAI's board approved a two-for-one stock split in the form of a special 100 percent stock dividend. Shareholders of record on August 17, 2015, will receive one additional share of RAI common stock for each share they own. The new shares will be issued on August 31, 2015.

Further, RAI's board also approved a 7.5 percent quarterly dividend increase to an annualized split-adjusted $1.44 per share, payable on October 1 to shareholders of record on September 10, 2015.