Reynolds’ first-quarter volume down
R.J. Reynolds’ domestic-market cigarette volume during the first quarter to the end of March, at 14.3 billion, was down by 3.8 percent on that of the first quarter of last year, 14.9 billion.
Total growth brands volume was up by 1.2 percent from 9.6 billion to 9.7 billion, driven by a 2.5 percent increase to 4.9 billion in sales of Camel. Sales of Pall Mall, the other growth brand, were down by 0.1 percent to 4.8 billion.
Other brand sales were down by 12.9 percent from 5.3 billion to 4.6 billion.
Reynolds’ share of the U.S. retail market, at 26.7 percent was up by 0.1 of a percentage point. The share of its growth brands was said to have been increased by 0.7 of a percentage point to 19.4 percent, while the share of its other brands was down by 0.6 of a percentage point to 7.2 percent.
Reynolds’ cigarette market performance was reported yesterday by Reynolds American Inc., which also reported Santa Fe and American Snuff figures.
Santa Fe’s domestic-market cigarette (Natural American Spirit) volume during the first quarter to the end of March, at 0.8 billion, was up by 10.7 percent on that of the first quarter of 2013.
And Natural American Spirit’s market share rose by 0.2 of a percentage point to 1.5 percent.
Sales of American’s moist snuff cans during the first quarter of 2014, at 116.9 million cans, were increased by 10.7 percent on those of the first quarter of last year.
Sales of Grizzly were up by 12.1 percent to 106.4 million, while sales of other brands were down by 1.6 percent to 10.5 million.
American’s share of the U.S. market, at 34.6 percent, was up by 0.8 of a percentage point. Grizzly’s market share was up by 1.1 percentage points to 31.5 percent, while the share of the company’s other brands was down by 0.2 of a percentage point to 3.1 percent.
RAI’s reported operating income during the first quarter of 2014, at $590 million, was down by 33.5 percent on that of the first quarter of last year, $887 million. Adjusted operating income was down by 3.6 percent to $665 million.
Reported net income was down by 28.5 percent to $363 million, and adjusted net income decreased by 3 percent to $386 million.
Reported net income per diluted share was down by 27.2 percent to $0.67, while adjusted net income per diluted share was unchanged at $0.72.
“Reynolds American’s reportable business segments continued to make excellent progress in the first quarter, with strong market-share gains on all their key brands,” said Daniel M. Delen, president and CEO of RAI.
“As we previously noted, R.J. Reynolds Vapor Company is investing heavily in the expansion of its highly differentiated Vuse Digital Vapor Cigarette this year, and this spending impacted RAI’s first-quarter earnings and margin as expected.”
Delen said that first-quarter performance reflected three key strengths of RAI’s operating companies: excellence in innovation, superior engagement with adult tobacco consumers and efficient execution. “These strategies are not just effective for success in a transformative environment; they also form the core of our companies’ competitive advantage,” he said.
