British American Tobacco PLC on Aug. 1 reported better-than-expected earnings for the first half of 2019 and said it was on track to deliver high single-digit adjusted earnings growth for the full year.
The maker of Dunhill and Lucky Strike cigarettes reported adjusted diluted EPS of 149.3 pence at current exchange rates for the six months to June 30, an 8.8% increase from the equivalent period in 2018, as a lower effective tax rate and improved performance by its main partner in India offset a decline in profit from operations. The company was expected to report normalized EPS of 146 pence according to consensus analyst estimates compiled by S&P Global Market Intelligence.
The company's shares rose 3.1% to 3,044.5 pence apiece in early trading on the London Stock Exchange.
Revenue for the first half increased 4.6% to £12.17 billion at current rates, boosted by increased demand for tobacco heating products, and the company said it expects revenue growth to accelerate in the second half of the year.
"In 2019, we are on track to be around the middle of our guidance range of 30%-50% New Categories revenue growth" per year, excluding the impact of currency movements, said CEO Jack Bowles in a statement. "We are on track to deliver another good financial performance in 2019, including high single figure adjusted earnings growth, at constant rates of exchange."
Profit from operations on a reported basis fell 1.3% to £4.38 billion, as an improvement in operating performance was more than offset by a £436 million charge related to the potential financial impact of a tobacco-related lawsuit filed in Canada.
BAT said cigarette volumes fell 3.7% to 332.1 billion sticks. Volume of tobacco heating products, however, jumped 17.2% to 3.9 billion sticks.