The maker of Camel and Newport cigarettes is sinking after saying it expects to sell less cigarettes next year
Srdjan Zivulovic/Reuters
Reynolds American, the parent company of cigarette brands such as Camel, Pall Mall, and Newport, is sinking in trading on Wednesday after the firm missed on earnings and announced its CEO is stepping down.
The tobacco company announced earnings of $0.61 per share against analyst expectations of $0.64. Revenue was also light at $3.21 billion versus analysts expectations of $3.31 billion.
The firm also announced that its current CEO, Susan Cameron, will be leaving the role over the next year to be replaced by COO of RJ Reynolds, Debra Crew, the largest subsidiary of Reynolds American. Crew will take over effective January 1, 2017.
Crew said during a call with analysts that the firm expects cigarette volumes to be lower in 2017. Sales growth bounced back into positive territory for the first time in year during 2015, but appeared to have cooled off. Crew said Reynolds expects industry volumes will decrease by 2.5% for 2016.
Following the news, the stock sold off as much as 7%, but had recovered to just a -5% drop as of 9:45 a.m. ET.
Srdjan Zivulovic/Reuters
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