BAT first-half profit tops estimates on ‘resilient’ U.S. demand

(Reuters) – British American Tobacco reported a better-than-expected profit on Friday, as the company sold more higher-priced cigarettes and saw strong demand for vaping products in the United States, its biggest market.

The Dunhill and Lucky Strike cigarette maker said consumption in the United States was “resilient” with the company growing the U.S. cigarette market share by 30 basis points in the first half of the year.

Overall, in developed markets, there was “little evidence to date of accelerated down-trading” and the company also saw strong e-cigarette and oral product demand despite consumer activation plans being affected by the COVID-19. Total cigarette and tobacco heating products volume declined 6.3% to the equivalent of 315 billion cigarettes, slightly better than the consensus forecast for a 6.5% drop, mainly due to COVID-related disruptions in emerging markets such as South Africa.

The company reported adjusted earnings of 157.8 pence per share for the first half of the year, higher than analysts’ forecast of 154.5 pence, according to Refinitiv Data.

Total revenue rose 0.8% to 12.27 billion pounds ($16.11 billion), slightly above analysts’ expectations of 12.20 billion.

BAT shares have fallen 18% so far this year, slightly better than the broader FTSE 100 index <.FTSE> that is down nearly 21% over the same period.

(Reporting by Siddharth Cavale in Bengaluru, Editing by Sherry Jacob-Phillips)