Net income of Reynolds American Inc, the manufacturer of Camel cigarettes, increased by 2.2% in the third quarter due to high cigarette prices which helped to compensate decline in cigarette sales.
The tobacco company’s income increased to $467 million (88 cents per share) for the quarter which ended on September 30. In the same period in 2013, the company reported an income of $457 million (84 cents per share).
Experts expected that Reynolds American income will be $2.18 billion, However, company’s representatives told that revenue (without excise taxes) increased 4.9% to $2.24 billion.
In July 2014, the tobacco company revealed its plans to purchase Lorillard Inc, the maker of Newport. The transaction charge is $25 billion. The deal will make Reynolds more powerful company and would improve its positions on the market. Today Reynolds American is number two tobacco company in the USA after Altria Group,the maker of Marlboros. Two most important brands for Reynolds American are Pall Mall and Camel, which are popular worldwide.
The company says that its subsidiary R.J. Reynolds Tobacco shipped almost 3% less cigarettes in comparison with an estimated 2.3% drop for the industry as a whole.
Volumes for Pall Mall decreased 1.5% and its market share dropped 0.1 percentage points to 9.3%. Volumes for Camel increased 3% and its U.S. retail market share increased 0.4 percentage points to 10.4%.
Today the company makes not only tobacco cigarettes, but also other tobacco products (chewing tobacco, snuff) and e-cigarettes. The company is focusing on these products due to numerous smoking bans and cigarettes price increases.