RICHMOND, Va. (AP) — Cigarette maker Reynolds American Inc.'s fourth-quarter profit fell 49 percent on pension charges and other costs ahead of the closing of its planned $25 billion takeover of Newport seller Lorillard Inc.
The nation's second-biggest tobacco company said Tuesday that it earned $148 million, or 28 per share, in the period ended Dec. 31, compared with $292 million, or 54 cents per share, a year ago.
Adjusted earnings were 87 cents per share, meeting Wall Street expectations, according to Zacks Investment Research.
Reynolds American said its revenue excluding excise taxes increased 5 percent to $2.13 billion on higher cigarette and smokeless tobacco prices, matching analyst estimates.
The company also said Tuesday that it remains confident its merger with Lorillard will close in the first half of the year. The deal, announced in July, would combine two of the nation's oldest and biggest tobacco companies, creating a formidable No. 2 to Richmond, Virginia-based Altria Group Inc., owner of Philip Morris USA. It is undergoing a federal antitrust review.
Reynolds American shares rose $1.61, or 2.4 percent, to $70.06 in morning trading.
The maker of Camel and Pall Mall cigarettes said the number of cigarettes sold by its R.J. Reynolds Tobacco subsidiary fell about 5 percent during the quarter to 14.9 billion, compared with an industry decline of 2 percent.
Volumes for Pall Mall fell about 5 percent and volumes for Camel fell less than one percent. The brands account for nearly 75 percent of the company's total cigarette volume.
Camel's market share increased 0.3 percentage points to 10.3 percent of the U.S. market, while Pall Mall's market share fell 0.2 percentage points to 9.3 percent.
The number of Natural American Spirit cigarettes it sold grew 14 percent to about 1.1 billion cigarettes.
Tobacco companies are also focusing on cigarette alternatives such as snuff, chewing tobacco and electronic cigarettes as tax hikes, smoking bans, health concerns and social stigma make the cigarette business tougher.
Volume for its smokeless tobacco brands including Grizzly and Kodiak fell 1 percent from a year ago. The brands had a 34.3 percent share of the U.S. retail market, though that market is tiny compared with cigarettes.
The company also said it has expanded distribution of its Vuse-brand electronic cigarette and added four new styles, including rich mint, chai and crema, in certain markets.
For the full year, the company said its profit fell more than 14 percent to $1.47 billion. Revenue excluding excise taxes rose about 3 percent to $8.47 billion. Cigarette shipments fell 5 percent to 61 billion cigarettes.
Reynolds American, based in Winston-Salem, North Carolina, said it expects 2015 profit of $3.65 to $3.80 per share.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum .