Reynolds American Q4 Profit Rises, But Results Miss Estimates; Hikes Dividend

(RTTNews) - Tobacco company Reynolds American Inc. (RAI) reported that its fourth-quarter net income increased to $292 million or $0.54 per share, from $139 million or $0.25 per share in the same quarter last year.

Quarterly adjusted earnings per share was $0.77, up 1.3 percent from the prior-year's $0.76, as higher cigarette and moist-snuff pricing, and lower MSA expense, more than offset lower cigarette volume. Analysts polled by Thomson Reuters expected the company to report earnings of $0.81 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted earnings per share excluded charges for non-cash trademark impairments, early extinguishment of debt, implementation costs, Engle progeny lawsuits and other tobacco-related litigation.

Net sales for the quarter declined to $2.039 billion from $2.078 billion in the prior year quarter. Seven analysts had consensus revenue estimate of $2.07 billion for the quarter.

The firm also announced a 6.3 percent increase in its quarterly cash dividend to an annualized $2.68.

The company's board had approved an increase from $0.63 per share to $0.67 per share in the quarterly cash dividend on the company's common stock, bringing it to an annualized $2.68. The dividend will be payable on April 1, 2014, to shareholders of record on March 10, 2014.

The company issued 2014 earnings per share guidance in the range of $3.30 to $3.45, up 3.5 percent to 8.2 percent from 2013's adjusted earnings per share of $3.19. Analysts project annual earnings per share of $3.44.