Earnings Preview: Reynolds American's EPS, Revenue Expected to Rise

Reynolds American RAI releases its next round of earnings this Tuesday, October 25, 2011. Here is Benzinga's everything-that-matters guide for this Tuesday's third quarter earnings announcement.

Earnings and Revenue:

Wall Street expects an EPS of 73 cents/share and revenues of $2.3 billion. Reynolds American's latest numbers will no doubt be compared with the company's year-ago quarter, when it reported a profit of 68 cents/share on revenues of $2.24 billion. We'll have to wait for Tuesday to see if Reynolds American reports higher EPS and a slight increase in revenue from the year-ago quarter, as analysts are expecting.

Here's how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter	Q2	Q1	Q4	Q3
EPS Estimate	$0.70	$0.59	$0.61	$0.67
EPS Actual	$0.67	$0.59	$0.60	$0.68

Stock Performance:

Shares of Reynolds American were trading at $39.01 as of October 19, 2011. Since January 1st, shares of Reynolds American have given investors a return of 24.9%. For a full 12 months, the return has risen by 31.9%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

• Long-term shareholders are already enjoying 12-month gains prior to the announcement

Average Stock Rating:

The average rating by analysts for Reynolds American is a Hold.

Competitors:

Want to check out the performance of Reynolds American closest competitors? Take a look at some of the company's peers in the consumer staples sector.

• Lorillard LO: Hold with a $2.05 recent quarter EPS
• Altria Group MO: Hold with a $0.53 recent quarter EPS
• Star Scientific CIGX: -$0.04 recent quarter EPS

Reynolds American is in the tobacco industry, which has experienced price/earnings growth of 1.7%.

Finally, a description of the company's main areas of operation: Reynolds American manufactures cigarettes and other tobacco products in the United States.

Take Action:

Now that you have reviewed all the numbers, be ready to move if the upcoming Reynolds American earnings report has any surprises. Also, come back to Benzinga after the announcement for a full recap and a guide to your next steps.

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