The 10-second takeaway
For the quarter ended June 30 (Q2), Reynolds American met expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue was unchanged. GAAP earnings per share grew.
Margins grew across the board.
Reynolds American tallied revenue of $2.18 billion. The seven analysts polled by S&P Capital IQ looked for sales of $2.19 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.84. The 12 earnings estimates compiled by S&P Capital IQ predicted $0.83 per share. GAAP EPS of $0.84 for Q2 were 7.7% higher than the prior-year quarter's $0.78 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 54.2%, 530 basis points better than the prior-year quarter. Operating margin was 36.6%, 110 basis points better than the prior-year quarter. Net margin was 21.2%, 80 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.14 billion. On the bottom line, the average EPS estimate is $0.85.
Next year's average estimate for revenue is $8.27 billion. The average EPS estimate is $3.22.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 605 members out of 654 rating the stock outperform, and 49 members rating it underperform. Among 214 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 205 give Reynolds American a green thumbs-up, and nine 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 $46.27.
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