Reynolds American Inc., the No. 2 seller of tobacco in the U.S., posted second-quarter profit that missed analysts’ estimates, hurt by lower cigarette sales volumes and increased acquisition-related interest expenses.
Earnings were 58 cents a share, excluding some items, the Winston-Salem, North Carolina-based company said in a statement on Tuesday. Analysts estimated 61 cents, on average. Sales excluding excise taxes rose 33 percent to $3.2 billion, trailing analysts’ $3.26 billion average projection.
Reynolds completed its $25.9 billion acquisition of Lorillard Inc. a little over a year ago, giving it control of the Newport menthol cigarette brand. Newport added 0.5 percentage points of retail market share from a year earlier. But deal-related costs and an increased number of common shares weighed on earnings per share.
The Camel cigarette maker also narrowed estimated range for full-year 2016 earnings per share to $2.26 to $2.34 from $2.25 to $2.35 and announced a $2 billion buyback program.
The shares fell 1.8 percent to $51.36 at 9:39 a.m. in New York. The stock gained 13 percent this year through Monday.