By News • Jul 31st, 2008 • Category: Stocks
On Wednesday the tobacco company Reynolds American Inc announced quarterly profits which is high above the expectations along with more than 5percent rise in its share because turn down in its U.S. cigarette shipment is slowed.
More new consumer moved toward its Grizzly brand as compared to its competitors because of there relatively high prices as a result Reynolds’ smokeless tobacco segment take advantage. Although increased cigarette prices also helped the company to maximize its profits.
Company’s Camel and Pall Mall Brands are strong in market as they got majority of its marketing support in the cigarette business segment. On the other hand Kool become constant. Brands which do not get enough marketing support could not perform well in market share.
According to an analyst it was quite a good performance in its cigarette shipments as 12 percent volume deficit was predicted which was only 8 percent in reality. Higher prices and reduction in cost compensated 8 percent fall in cigarette shipped to 23.9 billion cigarettes.
Since 1981 the cigarette Manufacturers had to face any restrictions in U.S as smoking in public place is banned and more and more advertisments flow in the market regarding the awareness in this behalf. Although there where some marketing restrictions also since 1998.
Higher cigarette prices and continue economic pressure on smoker did result in some growth in deep discount market share.
Apart from the entire problems profit rise in Conwood smokeless tobacco segment by approximately 5.5 percent.
Shweta Agwaral
