High-Yielding Imperial Tobacco Boosts Revenue

LONDON -- Imperial Tobacco  (LSE: IMT.L  ) released a positive trading update this morning, with shares up 25 pence, or 1.1%, at the time of writing.

Management praised "strong gains from our key strategic brands" -- which include Davidoff, Gauloises Blondes, West and JPS -- while revenue growth is being driven by "quality growth across [its] total tobacco portfolio."

Group net revenues are estimated to be up by around 4% at constant currency rates, with special mentions for the Eastern Europe, Africa & Middle East, and Asia-Pacific regions.

Stick equivalent volumes are expected to decline by up to 3%, in large part due to ongoing market weakness in Ukraine (cigarette) and Poland (fine cut tobacco) and compliance with international trade sanctions against Syria.

On a current-year forecast price-to-earnings ratio of 11.8% -- and forecast earnings per share growth of 9% -- the so-called "sin stock" looks good value for the money, even when pitted head-to-head against its rival British American Tobacco, which is also performing well.

Full-year results are expected on Oct. 30.

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