Reynolds American, Inc. (RAI): An Early Look at Earnings

But investors shouldn’t ignore the fact that some tobacco companies may fare better than others. Lorillard expects decent sales growth of 5% to 6% both this year and next, while even the larger Altria Group Inc (NYSE:MO) should manage modest revenue gains. By contrast, Reynolds is seen posting declining revenue throughout 2013 before bouncing back in 2014, suggesting that the company has work to do to preserve its competitive position.

As the first of the major domestic cigarette companies to report, Reynolds American, Inc. (NYSE:RAI) will give you a baseline on which to judge the entire industry. Look closely at sales and profit figures not just as a gauge of Reynolds American’s individual success but also as a gauge of the health of tobacco in the U.S. more broadly. In addition, as alternatives to traditional cigarettes become more popular, watch sales of its Vuse electronic cigarette as well as its smokeless tobacco division for signs of potential growth.

The article An Early Look at Reynolds American’s Earnings originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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