EARNINGS : BAT Revenue Up, Profit Plunges

Britain’s BAT Industries PLC, one of the world’s largest diversified tobacco groups, said today its third-quarter pretax profit plunged 89% as stock market losses hurt its Eagle Star insurance unit.

Earnings in the period slumped to $80.84 million from $796.5 million despite a rise in revenues to $8.64 billion from $7.18 billion in the same period last year.

The results were well below industry analysts’ expectations.

BAT shares initially fell on the news, but by midday in London they had recovered to $11.24, up 25 cents from Tuesday’s close.

Eagle Star’s investments, which are crucial to insurance company earnings, lowered profits by $418 million. But the company said its cigarette volume was 2% higher in the nine months ended Sept. 30, and profits were up 13%.