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