|
Litigation singes RJR
|
 |
January 28, 1999: 2:32 p.m. ET
Tobacco settlement, restructuring result in fourth-quarter loss of $585M
|
NEW YORK (CNNfn) - Food and tobacco conglomerate RJR Nabisco says charges related to litigation resulted in an increased fourth-quarter net loss compared with a year earlier.
Earnings from operations - without taking into account the litigation charges - declined from 1997 levels. But they still exceeded the consensus of Wall Street analysts.
Tobacco litigation settlements and restructuring costs resulted in a $780 million aftertax charge in the fourth quarter. That led to RJR's net loss of $585 million, or $1.83 per diluted share, more than 1997's fourth-quarter loss of $197 million, or 64 cents per share.
Setting aside charges in both years, however, RJR (RN) posted an operating profit of $195 million, or 58 cents per share. That's down from last year's $222 million, or 64 cents per share, but above the 51 cents a share consensus of analysts surveyed by First Call.
RJR also owns 80.5 percent of Ritz cracker and Oreo cookie maker Nabisco Holding Corp. (NA), which on Wednesday reported a better-than-expected operating profit of 50 cents per share.
Total sales fell 2 percent to $4.47 billion despite a 5 percent rise in worldwide tobacco sales. Cigarette sales rose 5 percent to $2.26 billion, helped by the large U.S. price increase implemented in November after the litigation settlement with the states was reached. The sales increase came despite a decline in volume of 9 percent, RJR said.
RJR has seen its international tobacco profit cut in half for two straight quarters and unit volume diminish by 22% over the last two years as the economy in Russia, where the company derives 20% of its international profit, has crumbled.
For all of 1998, income excluding charges declined 22 percent to $724 million, or $2.10 per diluted share, on revenue of $17.04 billion. That compares with 1997 income excluding charges of $933 million, or $2.72 per diluted share, on revenue of $17.06 billion.
Shares of RJR Nabisco were up 1/16 to 27-1/16 in Thursday afternoon trading.
|
|
|
RJR Nabisco
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
