RJR’s 3Q volume down 2.5 percent

Reynolds American Inc. (RAI) yesterday reported that R.J. Reynolds’ cigarette volume during the three months to the end of September, at 20.5 billion, were down by 2.5 percent on those of the three months to the end of September 2015, 21.1 billion.

Reynolds’ drive brands volume, at 19.0 billion, was down by 1.9 percent. Newport volume was increased by 0.9 percent to 8.9 billion, but Camel volume was down by 3.7 percent to 5.3 billion and Pall Mall volume was down by 4.9 percent to 4.9 billion.

The volume of other cigarette brands was down by 9.1 percent to 1.5 billion.

Premium-brand volume was down by 1.1 percent to 14.6 billion while value-brand volume was down by 5.8 percent to 5.9 billion, giving a premium-to-total volume mix of 72.8 percent, up from 72.1 percent.

Reynolds’ market share during the three months to the end of September, at 32.3 percent, was down by 0.1 of a percentage point on that of the three months to the end of September 2015, 32.4 percent.

The share held by Newport increased by 0.4 of a percentage point to 13.9 percent; that of Camel fell by 0.1 of a percentage point to 8.3 percent, while that of Pall Mall fell by 0.2 of a percentage point to 7.7 percent, giving Reynolds a drive-brand share of 29.9 percent.

The share held by other brands fell by 0.2 of a percentage point to 2.3 percent.

At Santa Fe, cigarette (Natural American Spirit) volume during the three months to the end of September, at 1.5 billion, was up by 15.7 percent on that of the three months to the end of September 2015.

Santa Fe’s share of the market increased by 0.3 of a percentage point to 2.3 percent.

Meanwhile, American Snuff’s moist snuff volume shipments during the three months to the end of September, at 127.9 million cans, were up by 2.1 percent on those of the three months to the end of September 2015.

Grizzly volume was up by 2.9 percent to 117.0 million cans, while the volume of other brands taken together was down by 6.4 percent to 10.8 million cans.

American’s share of the domestic market during the three months to the end of September, at 33.3 percent, was down by 0.5 of a percentage point on that of the three months to the end of September 2015.

Grizzly’s share fell by 0.4 of a percentage point to 30.7 percent, while the share of other brands fell by 0.2 of a percentage point to 2.6 percent.

RAI’s net sales for the three months to the end of September, at $3,205 million, were up by 1.4 percent on those of the three months to the end of September 2015.

Reported operating income was up by 26.5 percent to $1,526 million, while adjusted operating income was up by 10.6 percent to $1,554 million.

Reported net income was up by 31.1 percent to $861 million, while adjusted net income was up by 12.0 percent to $875 million.

And reported net income per diluted share was up by 30.4 percent to $0.60, while adjusted net income per diluted share was up by 10.9 percent to $0.61.

“We have completed a very successful first nine months for RAI, with excellent operating performance at all of our reportable business segments,” said Susan M. Cameron, president and CEO, in announcing the results yesterday.

“Newport’s and Natural American Spirit’s continued strong marketplace performance, along with higher pricing and productivity improvements, helped drive further growth in RAI’s third quarter earnings and margin…

“As part of R.J. Reynolds Vapor Company’s work on a variety of vapor platforms, the company plans to expand the availability of VUSE VIBE, a high-volume cartridge and closed-tank system with a rechargeable battery, later this year.

“VIBE offers more liquid than previous VUSE products, as well as a stronger and longer-lasting battery.

“VIBE is designed to hit the sweet spot that adult vapers tell us they want, and that’s the ease of use of a cigalike product combined with the performance of a tank system.”