R.J. Reynolds Cuts Its Profit Outlook

R.J. Reynolds Tobacco Holdings Inc., responding to discounts by No. 1 cigarette maker Philip Morris Cos., lowered its profit forecasts to increase spending on promotions.

Third-quarter net income will decline as much as 38%, R.J. Reynolds said. In July, the company said earnings would fall as much as 4% from the year-earlier period. Annual profit would drop as much as 19%. It had been expected to increase 5% to 7%.

R.J. Reynolds said third-quarter profit would be $130 million to $155 million, or $1.45 to $1.75 a share. Full-year earnings would be $620 million or $660 million, or $6.85 to $7.30.

R.J. Reynolds shares fell $4.72 to $52.58 on the NYSE.