The results allayed some of the fears sparked by Reynolds' penchant for missing its profit goals. The company posted disappointing results three of the four previous quarters.
Its fourth quarter numbers came in at 62 cents a share, on an adjusted basis, ahead of the 60 cents that Wall Street had forecast. Sales rose just over 4% to $3.19 billion, easing over the $3.16 billion that Wall Street forecast.
For the full year, the company has forecast EPS of $2.27 to $2.39 a share, though it had recently adjusted its forecasts moderately lower.
Last month Reynolds American agreed to a takeover by British American, the maker of Kent cigarettes, which would have the British tobacco company purchase the 57% of Reynolds it didn't already control in a $49 billion transaction.
The transaction is expected to give Reynolds' popular Newport menthol cigarette more exposure to European markets.
Shares of Reynolds ticked up about 1% in Thursday's morning trading, to nearly $61 a share, touching a 52-week high. The stock has increased 29% over the last 12 months, despite its record of profit shortfalls.
Like its rival Altria (MO - Get Report) , Reynolds, along with BAT, has been experimenting with alternative tobacco delivery systems. It has expanded its Vuse E-cigarette product, though the so-called "vaping" delivery systems have been met with criticisms that, from a health standpoint, they're no improvement over traditional combustible cigarette products.
Altria has been working with its former partner Philip Morris (PM - Get Report) on a product that utilizes a "heat don't burn" strategy that doesn't produce the smoke clouds that consumers criticize about vaping products, and is considered something of a gateway to smoking cessation.