Reynolds American Misses on Revenues but Beats on EPS

Before you go, we thought you'd like these...
Before you go close icon

Reynolds American (NYS: RAI) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Reynolds American missed slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share dropped.

Margins shrank across the board.

Revenue details
Reynolds American notched revenue of $2.08 billion. The seven analysts polled by S&P Capital IQ wanted to see revenue of $2.12 billion. GAAP sales were 0.1% higher than the prior-year quarter's $2.08 billion.

anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.72. The 12 earnings estimates compiled by S&P Capital IQ anticipated $0.68 per share on the same basis. GAAP EPS of $0.52 for Q4 were 1.9% lower than the prior-year quarter's $0.53 per share.

anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 46.7%, 10 basis points worse than the prior-year quarter. Operating margin was 27.1%, 350 basis points worse than the prior-year quarter. Net margin was 14.6%, 20 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.01 billion. On the bottom line, the average EPS estimate is $0.66.

Next year's average estimate for revenue is $8.69 billion. The average EPS estimate is $2.96.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 587 members out of 632 rating the stock outperform, and 46 members rating it underperform. Among 213 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 205 give Reynolds American a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Reynolds American is hold, with an average price target of $39.67.

Can your retirement portfolio provide you with enough income to last? You'll need more than Reynolds American. Learn about crafting a smarter retirement plan in "The Shocking Can't-Miss Truth About Your Retirement." Click here for instant access to this free report.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners