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WINSTON-SALEM, N.C. -- Reynolds American, the second largest U.S. tobacco company, reported its 10-fold increase in first-quarter profit was thanks to higher prices, growth in its smokeless tobacco business and productivity gains, The Associated Press reported.
The maker of Camel, Pall Mall and Natural American Spirit brand cigarettes earned $82 million in the period ended March 31, an increase of $8 million compared to a year earlier, the AP reported. Earnings adjusted to exclude one-time items were $1.11 per share, and analysts polled by Thomson Reuters on average expected adjusted profit of $1.07, the report stated.
Revenue excluding excise taxes rose 3.4 percent to $1.99 billion from $1.92 billion a year ago, again beating analysts estimates of $1.91 billion.
The company sold 18.2 billion cigarettes in the period, a 2.5-percent drop compared to a year earlier, when retailers and wholesalers cut their orders ahead of the federal excise tax increase, the AP reported. When adjusting for this, cigarette volume declined 4.8 percent, while Reynolds American estimated cigarette volume fell 7.3 percent industrywide.
Market share for Reynolds American's brands rose 0.2 points to 27.9 percent, on a rise in sales of Pall Mall cigarettes. Meanwhile, volumes of its Kodiak and Grizzly smokeless tobacco grew 12.2 percent compared with the year-ago period.
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