R.J. Reynolds to Cut 40% of Workforce

In July, Reynolds projected full-year operating income of $470 million to $495 million and net income of $235 million to $250 million, or $2.78 to $2.96 a share. At that time, the company said its guidance excluded possible future charges.

The company now expects operating income of $170 million to $220 million, with earnings of $50 million to $80 million, or 60 cents to 95 cents a share. The new full-year guidance includes not only the second-quarter restructuring charge, but also the third- and fourth-quarter charges, as well as increased savings estimates for 2003.

Reynolds believes earnings will grow in 2004, but the company said it wouldn't offer specific guidance for now.