What Reynolds American's Earnings Mean for Mutual Fund Investors (RAI)
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What Reynolds American's Earnings Mean for Mutual Fund Investors (RAI)

Reynolds American logo
Before the opening bell on Tuesday, Reynolds American (RAI) released its fourth quarter financial results. Here’s what the results mean for mutual fund investors.

Inside RAI’s Earnings

Earnings

The company reported earnings of $148 million, or 28 cents per share, down from $292 million, or 54 cents per share, a year ago. Excluding special items, earnings were 87 cents per share, matching analysts’ estimates.

Revenue
Revenue came in at $2.13 billion, up from $2.04 billion last year. Analysts expected to see $2.14 billion in revenue.

Outlook
For FY2015, RAI expects to see EPS between $3.65 and $3.80. Analysts expect to see EPS of $3.71.

Little Growth in Tobacco Sector

While income-focused investors have flocked to high yield tobacco plays like Reynolds American, there is little revenue growth for many of these companies. Despite the attractive dividend yields, these stocks carry a few risks including litigation risk and rising interest rate risk.

Mutual Funds to Watch

Investors interested in RAI may also consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in RAI.

The Bottom Line

The funds listed above allow investors to gain exposure to RAI while remaining diversified. Investors interested in RAI may also be interested in Phillip Morris (PM) and Altria (MO).

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Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

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Reynolds American logo

What Reynolds American's Earnings Mean for Mutual Fund Investors (RAI)

Before the opening bell on Tuesday, Reynolds American (RAI) released its fourth quarter financial results. Here’s what the results mean for mutual fund investors.

Inside RAI’s Earnings

Earnings

The company reported earnings of $148 million, or 28 cents per share, down from $292 million, or 54 cents per share, a year ago. Excluding special items, earnings were 87 cents per share, matching analysts’ estimates.

Revenue
Revenue came in at $2.13 billion, up from $2.04 billion last year. Analysts expected to see $2.14 billion in revenue.

Outlook
For FY2015, RAI expects to see EPS between $3.65 and $3.80. Analysts expect to see EPS of $3.71.

Little Growth in Tobacco Sector

While income-focused investors have flocked to high yield tobacco plays like Reynolds American, there is little revenue growth for many of these companies. Despite the attractive dividend yields, these stocks carry a few risks including litigation risk and rising interest rate risk.

Mutual Funds to Watch

Investors interested in RAI may also consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in RAI.

The Bottom Line

The funds listed above allow investors to gain exposure to RAI while remaining diversified. Investors interested in RAI may also be interested in Phillip Morris (PM) and Altria (MO).

Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next