Philip Morris International Inc. (PM) on Q2 2021 Results - Earnings Call Transcript

Operator: Good day, and welcome to the Philip Morris International Second Quarter 2021 Earnings Call. Today's call is scheduled to last about 1 hour, including remarks by Philip Morris International Management, and the question-and-answer session. . Media representatives on the call will be also be invited to ask questions at questions from the investment community. Now I'll turn the call over to Mr. Nick Rolli, Vice President of Investor Relations and Financial Communications. Please go ahead, sir. Nicholas Rolli: Welcome. And thank you for joining us. Earlier today, we issued a press release containing detailed information on our 2021 second quarter results. You may access the release on www.pmi.com. Emmanuel Babeau: Thank you, Nick. And welcome, ladies and gentlemen. I hope everyone listening to the call is safe and well. Our business delivered a very strong performance in the second quarter of 2021, coming slightly ahead of our expectation to match Q1's record high quarterly adjusted diluted EPS of $1.57 despite the continued challenges of the global pandemic. Most impressive was the continued strong growth of IQOS, which made up 13% of our volumes, and nearly 30% of our adjusted net revenues compared to 24% in the prior-year quarter. HTU shipment volumes grew plus 30% and plus 12% compared to the same quarter last year, and the previous quarter, sequentially to reach to 24.4 billion units, with strong growth across key geographies. We also continued converting adult smoker at a good pace, surpassing an estimated 20 million users, of which, almost 15 million have switched to IQOS and stopped smoking. Combustible net revenues grew by plus 4% In Q2 on an organic basis, reflecting a partial volume rebound against a weak prior year quarter and solid pricing, partly offset by market mix. Operator: Thank you. We will now conduct the question-and-answer portion of the conference. . In the interest of fairness and time, we ask thar participants keep it to a maximum of 2 questions each. Our first question comes from the line of Chris Growe with Stifel. Please go ahead. Chris Growe: Hi. Good morning. Emmanuel Babeau: Hi, Chris. Chris Growe: Hi, and nice quarter there. I do want to ask you two questions if I could, please. I want to start first with, you have IQOS ILUMA launching soon in Japan, and I assume you'll go into more markets. I think in this quarter you had shipments above consumption. Would you expect that still to be the case? I know you've mentioned building inventories. Would that still likely happen in the second half of the year, or we've already built inventories sufficiently to handle that launch? Emmanuel Babeau: Thank you, Chris. No, I think there was an element of preparation for the launch in this Q2. For the rest of the year, at that stage, we expect IMS and shipment to be more aligned, so we don't expect to have further material differences at that stage emerging in H2. Chris Growe: Okay. And just a question on the combustible business, and I know you gave some good detail on that. I guess my question would be that you did have a softer market share overall in combustibles. I think you mentioned you expect your share to stabilize there over time. I just want to get a sense if you thought that you could stabilize your combustible market share this year? And I think related to that, just to maybe give a little more color around the Price environment and how competitive it is right now in combustibles, think there may be Risk Factor that's contributed to less pricing for your business in that area. Emmanuel Babeau: Sure, Chris. On this objective to stabilize our market share in the CC segment or CC category, that's a clear objective that we have. Of course, it's a year-on-year stabilization that we want to reach. We are stabilizing sequentially quarter-on-quarter, and it's good to see that the Q2 market share is showing this kind of improvement versus Q1. We are not that there yet in terms of stabilization year-on-year. That's an objective that we have gradually for the coming quarters. We'll see when we are able to reach it. But that's clearly something that we want to pursue. On the pricing environment. As you have seen, we started nicely the year. Q2 was still quite good. I would cite Indonesia, we are reporting a price impact of about 5%, so clearly positive. H2 is more difficult as we've been flagging it in term of basis of comparison, there was a VAT decrease in Germany, there is a different pattern in excise duty increase in Australia. So that is going to play. And we are also going to monitor what is the situation as, hopefully, we are exiting the COVID crisis, which exactly what is the timing and how is the exit. But we know that many economy would still stay quite impacted by that. We'll be, of course, monitoring the capacity of our customer to follow price increase and that will be certainly driving our decision when it comes to price increase. I would say we're going to monitor the situation. We're going to see what is happening. There would be certainly question on evolution of inflation year-end there as well that we're going to take into account. A lot of unknown at that stage, but we'll take that into account to monitor and decide on price increase. Nevertheless, we have been flagging the fact that after a 3% increase in H1, we do confirm the overall bracket of 2% to 3% for the full year, which means that we expect, notably and partially, because of tougher comps in H2, an H2 that could be less favorable in term of price increase than H1. Chris Growe: Thank you for all the perspectives. Emmanuel Babeau: Thank you. Operator: Our next question comes from Michael Lavery from Piper Sandler. Piper Sandler. Co. Michael Lavery: Thank you. Good morning. Emmanuel Babeau: Hi, Michael. Michael Lavery: I just wanted to ask a couple of questions on Indonesia. One, it follows on on some of the pricing discussion, I guess. You call it out, obviously, as an offset to some of the favorable pricing. Can you just help us understand a little bit better the dynamics there and what to expect looking ahead? Emmanuel Babeau: Sure. So remember Indonesia was a very tough market last year, really hit hard by the pandemic. It doesn't mean, unfortunately, that the country has exited the crisis. And until recently, there has been new announcement of lockdown and restriction. It's probably that the impact was so strong last year that we're comparing to probably favourable basis of comparison, but the situation is certainly not back to normal there. Nevertheless, what we have seen is certainly an improvement of the situation, again, based on probably favourable comparison. We are doing well ourselves when it comes to the premium market, what we call the Tier 1, with more excise duty, and we are gaining share there. And that explains that we are able to grow our volume this year. But we are also, unfortunately, at the same time seeing the Tier 2 category, the one enduring lower taxes, that is still gaining ground and probably getting close to 30% market share. It used to be, at the end of last year, around 25%, 26%. That is playing the other way around, and hopefully this is going to be corrected with evolution on the excise duty policy put in place by the government. But, of course, we don't have any news on that and we don't know if and when it's going to happen. That is a situation that we are facing. And Indonesia, there is clearly improvement versus last year. It doesn't mean that the environment, when it comes to possibility of price increase, is becoming favorable, but at least it's no longer the kind of very negatively oriented market that it used to be for us last year. Michael Lavery: And just to confirm then on your pricing, are you saying that you're not getting any increases, or have you actually lowered prices? Emmanuel Babeau: We are impacted by the increase in duty, so we are increasing price, but it's still having a negative impact. And that's why there is a difference between what we are reporting in term of price impact with Indonesia and without Indonesia. So overall it's still having a bit of a negative impact. Michael Lavery: I got it. So you're increases aren't fully offsetting the duty increase? That's correct. Michael Lavery: And then just on IQOS in Indonesia, I know you haven't called out a launch there. And the internet can be a funny creature. But we find about a dozen stores in Jakarta that all look quite proper and have really official sounding language. Are those resellers of products they are getting somewhere else, or do you have a sort of a quiet launch there? Can you just give us a status of how IQOS sits in Indonesia today? Emmanuel Babeau: There is no official launch in the IQOS club where we may gather some user. As you know, Indonesia is, first and foremost, a critic market. And while we certainly have the objective to develop a specific hidden and gum device for kretek, we haven't been launching it yet. We do that, of course, addressing only part of the population, the one with the purchasing power that can afford the current devices. And also, a small group of people that are non-kretek, if you want, smoker but that's a very small fraction of the consumer. That could be the element that you are referring to, but there is no offficial global launch, if you want, at that stage. Michael Lavery: Okay. Thanks very much. Emmanuel Babeau: Thank you. Operator: Our next question comes from Gaurav Jain from Barclays. Please go ahead. Gaurav Jain: Hi. Good morning. Emmanuel Babeau: Hi, Gaurav. Gaurav Jain: Hi. A couple of questions from me. One is on the guidance that you had at Investor Day greater than 9% EPS growth over 2021 to '23, and you are clearly coming quite ahead of that this year at almost 13%. So how should we interpret it is what I'm trying to understand; that there is a slowdown in the next 2 years because you have these tax gap closures in Germany which will impact the high cost realization in that market next year and potentially in some other European markets? Or could be that . Emmanuel Babeau: Well, thank you for the question, Gaurav. I think you're going to far. We've been sharing this three-year guidance and objective at the time of the Investor Day, more than 9%, we are off to a strong start because we are targeting indeed for the first year 12% to 14%, it's clearly above the?9?, so I think we're compliant for the time being with the overall beyond 9%. And that means that we are certainly on good track to deliver the more than 9%. But I don't see a contradiction between the more than 9 and what you said the new good news, which is the strong start in 2021 Gaurav Jain: Sure. And there is more of these past gap in Europe, how would that impact your potential to achieve this EPS growth guidance? Emmanuel Babea: I mean, of course, you can make whatever scenario, and it's difficult to react to the most extreme scenario. But I think we are taking into account and we have always said that, that there could be some reduction, gradual reduction, to the gap between CC, and even on other product when it comes to excise duties. That is absolutely factored in our guidance. We have the capacity to increase price. We've been repeating the fact that IQOS and the consumable that are coming with IQOS is a premium product, that is already a superior expense for the customer. And that is commanding a premium in terms of price positioning as well. Today, thanks to the lower excise duty, very often you're going to have consumable at a cheaper price than the premium combustible product like Marlboro. That is something that, of course, could be changed and we could increase price. And at the same time, we continue to see more and more governments and regulators saying that there should be a difference between combustible and heat-not-burn because heat-not-burns are better product, and that should be used, certain ly, as an incentive to a smoker switching to heat-not-burn category and to move to better product for them. We certainly believe that there will be some decrease in some country, but it's not going to be necessarily the case everywhere. We could also envisage increase in the gap. We haven't seen that recently in the EU, but we've been seeing that being installed in other country. And on the long term, we continue to believe that there will be still some nice difference between the two that is fully justified by the fact that these are better products. to say that we are ready to cover for certainly possible reduction in the gap. We think that some of that is going to happen anyway for sure, Germany being one example. And at the same time, we believe that there will be growing, I would say, consensus on the fact that there should be a clear differentiation between combustible and heat-not-burn product. Gaurav Jain: Sure. Thank you. If I can ask a quick one on Japan. We have this right gap closure, the?task? gap closures in October, and that will throw up a lot of volumes up in the market which will be moving, and you're launching IQOS ILUMA. There is a potential to launch a lower priced IQOS variant, maybe reposition IQOS 3 DUO at a lower price point to capture these volumes from the cigarette low category which will probably move. Emmanuel Babeau: Certainly, Gaurav, with IQOS ILUMA, we are going to enrich the premium category for product. And as we keep saying, that's going to be a real, I would say, major change for customers, and it's going to represent for them clearly a big, big progress, killing the remaining pinpoints. And therefore, of course we focus on that for the time being. We believe the potential is huge as we've been highlighting. Now, depending on how the market is evolving, certainly we'll see what is the interest of launching new devices with a different positioning. The ultimate goal, as we also said in several instances, is certainly, in any case, to have a full coverage of the spectrum of the market, from the most premium positioning to certainly more value for money designed to cost simple product that are of course delivering an experience that is not at the level of the prime experience, but that is value for money and good enough experience for other type, I would say, of customers So Japan will make no exception in our willingness to cover once again, the full market from premium to medium and even low price positioning. Gaurav Jain: Thanks a lot. Emmanuel Babeau: Thank you. Operator: Our next question comes from Bonnie Herzog, from Goldman Sachs. Please go ahead. Bonnie Herzog: Thank you. Hi, Emmanuel. A - Emmanuel Babeau:: Bonnie Herzog: I wanted -- Hi, I wanted to circle back just on guidance. I just have a couple of questions. I -- thinking about this, Ukraine your EPS guidance for the full year, as you expect, industry volumes are improving, but it still does?imply? a decent step-down of growth in the second half despite lapping a relatively easier comp. Now, you did call out a few things, you called out incremental cost associated with the rollout of ILUMA and maybe some gross margin pressures as you expect to sell more devices in the second half. So I just want to make sure I understand all of the puts and takes, or any incremental pressures you're Operating in the second half, half. And then I just wanted to also clarify as it relates to I buybacks. You did mention your guidance doesn't include a material impact from any share buybacks, but just wanted to verify. Does this mean you're not going to be buying back as aggressively, in the second half of this year you're just just including buybacks at all:ot including buybacks at all in the guidance? I just wanted to make sure I understood that. Emmanuel Babea: Sure, Bonnie. Very clear. Maybe starting with the buyback to make it clear. No, no, we're not making any kind of guidance on what's going to be the buyback or assumption. As we said, we want to be really, super flexible. And frankly, all scenario for the magnitude of the buyback in H2 can be envisaged. But precisely because we want to keep flexibility, we don't want to put any kind of assumption on the amount of buyback for H2. That's really the way you should understand it. Now on the H2 margin versus H1, because I guess that's really your question. I think you started to summarize well the reason for the different margin evolution profile, but I'm happy to go through all the element. Certainly, what's going to be common between H1 and H2 is strong dynamism in top line with continued favorable evolution, of course, on our IQOS business. We are still facing on the CC business, also, some relatively easy comp last year, so that should have an impact on theour on of our CC business. We continue to have the nice mix impact driven by the IQOS growth on our revenue first week, so that is going to stay. And of course, that's the reason why we are raising the guidance on the revenue organic growth to 6 to 7. It's our confidence on the continuation of strong dynamism on revenue growth in H2. Then on other element that could be different, there is, as I said it answering a previous question on price, we see H2 possibly being more challenging than the 3% price increase on the CC business that we delivered in H1, so that's clearly one element. Another one is the level of productivity. You have seen the number 300 million. In H1, we target 1 billion over a 3-year period. Obviously, the 300 million is not necessarily a sustainable amount if you want for a 6 months period. So there was some front-loaded element in productivity this year. It doesn't mean that we don't intend to generate a nice productivity in H2, but not necessarily at the same level as the 300 million in H1. That's going to be another element. Then there are all the impact of the launch of ILUMA. And I see indeed on the margin to impact, One is the fact that when you launch a new product, it's true for any business, any industry. Your cost are not optimized. You don't have yet the volume to fully amortize all the investment. You haven't been optimizing all your processes. So there will be an impact on the gross margin coming from increased cost as we launch ILUMA. This is going to, of course, disappear overtime. I'm not able to tell you exactly how long it's going to take, but let's say 18 to 24 months is the typical, I would say, horizon to get to full productivity when you have some innovation. This is going to have an impact on H2. Then, we said it as well, the fact that we're going to sell more device, an ILUMA device, that is going to boost revenue, but it's not going to have the same impact as consumable on the gross margin, and, of course, with an impact on the gross margin rate. And last element that I have certainly top of mind, these 300 to 400 million increase investments in H2 versus H1. me iAnd these investments are going to be obviously where it's going to make an impact for the Company. So it's about innovation, it's about commercial and marketing capacity, it's about digitizing further our business and the Company. That's where we're going to put that money. So you need to take all these elements into account to understand the different profile of margin evolution between H1 and H2. But having said that, obviously, we are still targeting a very nice growth of our revenue OI and adjusted EPS in H2 obviously. Bonnie Herzog: Okay, that was really helpful and I appreciate all that. Obviously, there's a lot of puts and takes, but broadly, given the raised guidance, you've feel pretty darn good about the momentum and just the improvements in industry volumes. That's encouraging. If I may, I wanted to ask a second question just on the competitive environment, especially as I think about what Japan Tobacco is doing by launching their new Ploom X. And it sounds like they plan to launch it at a pretty steep discount to drive trial. Now, this coincides with the launch of ILUMA in Japan. I just wanted to understand your strategy in terms of positioning ILUMA especially as it relates to price. Maybe overall, how concerned are you with stepped-up competition and how confident are you that you're going to be able to maintain share and ultimately continue to take share? Thanks. Emmanuel Babeau: Yes. Bonnie, Certainly, that's of course a very good question. I happy to elaborate on it. First and foremost, and that's probably the most important in my answer, we are really happy to see competition really taking now the bih tategueyas a big priority. And showing, I think increase commitment engagement beyond the category. We think that the shared vision on the fact that we need jointly to phase out cigarette and develop better product for smokers is a way, certainly, to accelerate the journey to end smoke the world. To see competition realizing that this is a great category, this is answering smokers need and expectation, putting more innovation, more investment there in the category, that's just great. And I think we can start seeing in some geography where competition increase investment, we can see the overall growth of the market accelerating. And of course, as we take a lion's share of that, that is very good news. Having said that, obviously, what is important for the smoker is the capacity to find with it heat-not-burn tech nology and proposal. Something that is mimicking, to the closest way possible, the experience versus combustible cigarette. And that's where our technology, our capacity to innovate, is making a big difference. And that's where probably some of the competition is struggling a little bit, and that is the reason why some of them believe that they have to discount their product to get some traction. So what does it generate? At the end of the day, it generates the fact that you may have a trial because the device is coming almost for free, the consumable is cheaper. But then if it's not satisfactory, if it doesn't provide the same pleasure, the same benefit as what you have with an IQOS experience and we love further more with IQOS ILUMA, then whether you switch back to IQOS, or you may just be back to combustible cigarette because as you're feeling that that's not satisfactory versus what you really enjoy. And therefore, it's not whether playing the role of converting smokers to heat-not-burn, and you create lot -- lower average consumption device and lower loyalty. So we continued to be a firm believer that at the end of the day, just the right technology, the right experience will convert the majority of the smokers to switch to better product and to heat-not-burn category. And we believe that this is exactly what we are offering with IQOS. And that make us confident on our capacity to retain big market share. It doesn't mean that we're not going to propose also, simpler device, always with our capacity to innovate. Targeting, as I said, different purchasing power, different expectation. But certainly we will continue to lead the way when it comes to a premium product delivering a superior experience. Bonnie Herzog: Alright, very helpful again, thank you so much for all of that. Emmanuel Babeau: Thank you, Bonnie. Thank you. Operator: Our next question is from Pamela Kaufman, from Morgan Stanley. Pamela Kaufman: Hi. Good morning. Emmanuel Babeau: Hi, Pamela. Pamela Kaufman: I was hoping that you could elaborate on your plans for increased investment in the second half in terms of what initiatives you will be spending behind, how much will be for ILUMA versus VEEV or the other reduced risk offerings. And then in terms of the level of spending, the $300 to $400 million, is that primarily related to the launch in Japan? And should we think about annualizing this level of incremental investment for next year as you expand into additional markets? Emmanuel Babeau: Thank you, Pamela. I have to say, I fully understand your curiosity and that you want to know more about this extract in order to form an opinion. But I'm afraid I will have to disappoint you because, as you can imagine, that is super sensitive and we don't want to disclose the detail of that. Nevertheless, I'm certainly happy to say that we are putting investment in places that are going to move top-line, i.e. growing more volume, more conversion on a smoker switching to IQOS. Certainly, part of the amount is going to be behind the launch of IQOS ILUMA. But not only, there are also commercial activity. As we see, a number of markets returning to a certain normalcy. I will not say we are fully there, but certainly more reason to reaccelerate a number of marketing and commercial activity. And that's going to be important. We are also accelerating in term of innovation, and we are putting more money in life science and to build more presence in RRP category notably, so that's part of the accelaration. And we also signal it's going to be much more marginal, but that we may have to very selectively reinvest here and there on CC where it's possible. I would say it's going to be a small fraction of the extra investment, butt we have this objective of stabilizing our market share. So I think with that, Pamela, you have really what is behind the 300 to 400 million. No, you don't need to necessarily annualize that, but let's be clear we're going to launch ILUMA in many more country next year in 2022. And And I'm not able to elaborate at that stage on what's going to be the plan in term of investment, but I would expect that, yeah, we'd certainly want to invest with a great return on this new offering and new technology. S that would have some impact on our investment next year. Remember, nevertheless, we have a very ambitious program to generate 1 billion efficiency on S G&A. We have ambition to be very dynamic on revenue. And therefore, our goal over a three-year period is to reduce nicely the SG&A on revenue ratio to create a driver for increased profitability. And of course, including all this investment that absolutely remained a big ambition that we have. Pamela Kaufman: Thank you. That's very helpful. And my other question is, can you discuss the rationale behind the new management structure in the America s? I'm just curious how, if at all, it influences the Company's priorities in the region. Should we anticipate any changes to the way that IQOS ' U.S. rollout is conducted, or any changes in the Company's strategy towards the U.S. market, particularly given that Deepak Mishra 's background is in strategy and M&A?. Emmanuel Babeau: Well, thank you for highlighting the great talent of Deepak and we're all very pleased to see him taking his new responsibility. I think it just highlights, certainly, the potential that we see globally for Americas but notably, of course, for the U.S. We want to keep working in close interaction with Altria on IQOS. We flagged the fact that we could have, certainly, for IQOS VEEV some ambition. You will allow me not to elaborate more on that, but that certainly mean that we see the U.S. as actually a country where reduced risk product have a great potential and we want to participate in that potential. Pamela Kaufman: Thank you. Emmanuel Babeau: You're welcome. Operator: Our last question comes from Vivien Azer from Cowen. Please, go ahead. Vivien Azer: Hi. Good morning. Thank you. Emmanuel Babeau: Hi Vivien. Vivien Azer: Hi. My first question is on VEEV. I was wondering if you could expand and offer any preliminary insights. I know that it's still early days, but for the consumers that are engaging with that product, are they skewing towards legacy IQOS consumers, are they newer IQOS consumers, new consumers to the platform in general? Any other insights would be very helpful. Thank you. Emmanuel Babeau: Sure, Vivien. Indeed, we -- on VEEV, this is what I could call a soft launch for a number of reason. We want to learn the category. We are learning in many dimension including age verification, which we see as absolutely paramount. And the obvious initial move from us was to put VEEV as the nice complement for some of the already IQOS been user in the case of polyusage. And that was a natural move from people who were knowledgeable of IQOS already, the technology, the great experience the IQOS brand can provide. I think we are moving now to new dimension. We have beyond this initial move some great feedback coming from consumer that show that it's not only the elegance of the design, but the overall experience, the quality of the product that is comparing very well when we do test versus competitors. So time to certainly accelerate in our ambition that will come with more launches, of course, development of more flavors. So after this first step in the category, you should expect us to certainly increase ambition on vaping. Vivien Azer: Perfect. Thank you. And my followup question is just on capital allocation. It's been a while since we've seen the Company be this acquisitive. In short order, do you feel comfortable that you've filled white space or knowledge gaps in your portfolio, or should we expect more bolt-on acquisitions going forward? Thank you. Emmanuel Babeau: My view would be, Vivien, that with the proposed acquisition of Fertin and Vectura, we would certainly really build a very strong platform on which for our 2 ambitions on inhale therapeutic and on self-care wellness, we would have indeed very strong platform, and notably from life science perspective. For the life science, that would be great. That's certainly the view that we have today on that topic. Vivien Azer: Thank you. Emmanuel Babeau: Thank you. Operator: This concludes the question-and-answer session. I will turn it back over to management for closing remarks. Emmanuel Babeau: Alright. Well, let me leave you with some key messages then. First, despite the slower recovery from pandemic in certain markets, we are happy to report a very robustful first half performance with a record high adjusted diluted EPS and raised 2021 guidance. Second, the impressive growth of IQOS continues. And we remain on track to deliver our target of 95 to 100 billion units for the year. Third, our Combustible Business is improving sequentially as the recovery from the pandemic infraction in many key markets. Lastly, we are building towards important milestone in our Beyond Nicotine strategic vision, as part of our business transformation. Thank you again for joining us and talk to you soon. Operator: This concludes today's conference call. You may now disconnect.
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Philip Morris International Inc. (NYSE: PM) Reports Mixed Q2 Earnings

  • Philip Morris International Inc. (NYSE:PM) surpassed EPS estimates but fell short on revenue expectations in Q2 2025.
  • The company's smoke-free segment showed significant growth, contributing to 41% of total revenues.
  • Despite strong financial performance, guidance for slower EPS growth in Q3 led to a nearly 4% drop in premarket trading.

Philip Morris International Inc. (NYSE:PM), a leading tobacco company known for its Marlboro cigarettes, reported its second-quarter earnings on July 22, 2025. The company achieved an earnings per share (EPS) of $1.91, surpassing the estimated $1.86. However, its revenue of $10.14 billion fell short of the anticipated $10.32 billion, leading to a mixed market reaction.

Despite the positive EPS, Philip Morris experienced a nearly 4% drop in premarket trading. This decline was primarily due to the revenue shortfall, attributed to decreased cigarette sales and lower-than-expected shipments of ZYN nicotine pouches. The market's negative response highlights the challenges Philip Morris faces in balancing earnings performance with revenue growth.

Philip Morris demonstrated a strong year-over-year revenue increase of 7.8%, reaching $10.14 billion. The company's gross profit surged by 17.6% to $6.9 billion, and operating income rose by 6.2% to $3.71 billion. These figures indicate significant margin growth, showcasing the company's ability to manage costs effectively despite revenue challenges.

The smoke-free segment of Philip Morris showed promising results, with a 15.2% revenue growth and a 23.3% increase in gross profit. This segment now accounts for 41% of the company's total revenues, reflecting a strategic shift towards reduced-risk products. The company raised its full-year adjusted EPS guidance to a range of $7.43 to $7.56, up from the previous forecast, indicating confidence in its future performance.

Philip Morris has a price-to-earnings (P/E) ratio of approximately 36.91, suggesting the price investors are willing to pay for each dollar of earnings. The company's price-to-sales ratio is about 7.33, reflecting the market's valuation of its revenue. Despite these positive metrics, the guidance for the third quarter suggests a slowdown in EPS growth, which may have contributed to the decline in stock price.

Philip Morris Gains as Smoke-Free Surge Prompts Strong Q1

Philip Morris International (NYSE:PM) delivered better-than-expected results and raised its full-year earnings outlook, sending shares more than 2% higher in pre-market trading.

The company posted adjusted earnings of $1.69 per share, ahead of analyst expectations of $1.60. Revenue climbed 5.8% year-over-year to $9.3 billion, also topping estimates. Margin expansion and volume gains helped drive the strong performance.

A major growth driver continues to be the company’s smoke-free portfolio, which includes heated tobacco products and oral nicotine pouches. Organic revenue from this segment surged 20.4% and now makes up 42% of total net sales. Heated tobacco shipments rose nearly 12% to 37.1 billion units, while in the U.S., ZYN pouch shipments jumped 53% year-over-year to more than 200 million cans. The company now expects full-year ZYN volumes between 800 and 840 million cans, significantly above earlier projections.

Boosted by favorable currency trends and product momentum, Philip Morris raised its adjusted EPS forecast for 2025 to between $7.36 and $7.49, up from the prior range of $7.04 to $7.17. The company reaffirmed its expectations for organic revenue growth of 6% to 8% and operating income growth of 10.5% to 12.5%.

With a fast-expanding presence in the smoke-free category and rising global demand, Philip Morris is positioning itself for another year of solid growth and profitability.

Philip Morris Gains as Smoke-Free Surge Prompts Strong Q1

Philip Morris International (NYSE:PM) delivered better-than-expected results and raised its full-year earnings outlook, sending shares more than 2% higher in pre-market trading.

The company posted adjusted earnings of $1.69 per share, ahead of analyst expectations of $1.60. Revenue climbed 5.8% year-over-year to $9.3 billion, also topping estimates. Margin expansion and volume gains helped drive the strong performance.

A major growth driver continues to be the company’s smoke-free portfolio, which includes heated tobacco products and oral nicotine pouches. Organic revenue from this segment surged 20.4% and now makes up 42% of total net sales. Heated tobacco shipments rose nearly 12% to 37.1 billion units, while in the U.S., ZYN pouch shipments jumped 53% year-over-year to more than 200 million cans. The company now expects full-year ZYN volumes between 800 and 840 million cans, significantly above earlier projections.

Boosted by favorable currency trends and product momentum, Philip Morris raised its adjusted EPS forecast for 2025 to between $7.36 and $7.49, up from the prior range of $7.04 to $7.17. The company reaffirmed its expectations for organic revenue growth of 6% to 8% and operating income growth of 10.5% to 12.5%.

With a fast-expanding presence in the smoke-free category and rising global demand, Philip Morris is positioning itself for another year of solid growth and profitability.

Philip Morris International Inc. (NYSE:PM) Maintains Strong Market Position with Innovative Products

Philip Morris International Inc. (NYSE:PM) is a leading tobacco company known for its innovative products and global reach. The company is renowned for its non-traditional products like IQOS and ZYN, which are gaining popularity and contributing to its financial success. Philip Morris competes with other major tobacco companies, striving to maintain its market position through strategic developments and product diversification.

On October 30, 2024, Barclays maintained its "Overweight" rating for Philip Morris, indicating confidence in the company's future performance. The stock price at the time was $131.57, reflecting a recent increase of approximately 0.82%. Barclays also raised its price target for Philip Morris from $145 to $155, suggesting potential for further growth.

Philip Morris recently reported a strong third-quarter earnings performance, reaching a new all-time high. The company achieved double-digit net revenue growth and increased its full-year 2024 guidance. This positive outlook is supported by the rapid growth of its non-traditional products, which are outpacing traditional tobacco products and boosting gross profit.

The company's adjusted earnings guidance for fiscal year 2024 anticipates up to a 7.3% year-over-year growth. This optimistic projection has attracted attention from investors and stakeholders, as highlighted by the Zacks Analyst Blog. Additionally, Philip Morris maintains a strong dividend coverage ratio, ensuring continued returns for shareholders.

Philip Morris's market capitalization is approximately $204.57 billion, with a trading volume of 4,402,809 shares. The stock's performance has drawn interest from ETFs with exposure to the tobacco sector, further emphasizing its significance in the market. The company's strategic focus on innovative products and financial stability positions it well for future growth.

Philip Morris International Inc. (NYSE:PM) Maintains Strong Market Position with Innovative Products

Philip Morris International Inc. (NYSE:PM) is a leading tobacco company known for its innovative products and global reach. The company is renowned for its non-traditional products like IQOS and ZYN, which are gaining popularity and contributing to its financial success. Philip Morris competes with other major tobacco companies, striving to maintain its market position through strategic developments and product diversification.

On October 30, 2024, Barclays maintained its "Overweight" rating for Philip Morris, indicating confidence in the company's future performance. The stock price at the time was $131.57, reflecting a recent increase of approximately 0.82%. Barclays also raised its price target for Philip Morris from $145 to $155, suggesting potential for further growth.

Philip Morris recently reported a strong third-quarter earnings performance, reaching a new all-time high. The company achieved double-digit net revenue growth and increased its full-year 2024 guidance. This positive outlook is supported by the rapid growth of its non-traditional products, which are outpacing traditional tobacco products and boosting gross profit.

The company's adjusted earnings guidance for fiscal year 2024 anticipates up to a 7.3% year-over-year growth. This optimistic projection has attracted attention from investors and stakeholders, as highlighted by the Zacks Analyst Blog. Additionally, Philip Morris maintains a strong dividend coverage ratio, ensuring continued returns for shareholders.

Philip Morris's market capitalization is approximately $204.57 billion, with a trading volume of 4,402,809 shares. The stock's performance has drawn interest from ETFs with exposure to the tobacco sector, further emphasizing its significance in the market. The company's strategic focus on innovative products and financial stability positions it well for future growth.

Deutsche Bank Reaffirms "Buy" Rating for Philip Morris International (NYSE:PM) with New Price Target

  • Deutsche Bank has raised its price target for Philip Morris International (NYSE:PM) to $142 from $135, maintaining a "Buy" rating.
  • Philip Morris's shift towards smokeless products and strong quarterly earnings report, with sales rising 8.4% year-over-year to $9.9 billion, have contributed to its stock reaching new heights.
  • The company's focus on non-cigarette products, like ZYN nicotine pouches and IQOS heated tobacco devices, has driven significant growth, with ZYN shipments in the U.S. increasing by 41.4%.

On October 22, 2024, Deutsche Bank reaffirmed its "Buy" rating for Philip Morris International (NYSE:PM), setting a new price target of $142, up from $135. At the time, PM's stock was valued at $131.41. This endorsement comes as Philip Morris has shown strong market performance, particularly in the last three months.

Philip Morris has been a standout performer, with its stock price reaching new heights. This resurgence follows a period where tobacco stocks were less favored by institutional investors. The company's strategic shift towards smokeless products, like ZYN nicotine pouches and IQOS heated tobacco devices, has reignited interest in the stock.

The company's recent quarterly earnings report further supports this positive outlook. Philip Morris reported record earnings, with sales rising 8.4% year-over-year to $9.9 billion, surpassing estimates by 2.3%. Earnings per share also exceeded expectations, increasing 14.4% to $1.91. This strong financial performance led to an 8% midday trading surge in PM's stock, reaching all-time highs.

Philip Morris's success is largely driven by the growing demand for its non-cigarette products. Shipments of ZYN nicotine pouches increased by 43.6%, while heated tobacco unit shipments rose by 8.9%. Even traditional cigarette shipments saw a slight increase of 1.3%. These results have prompted the company to raise its full-year earnings outlook.

The company's focus on smokeless alternatives has paid off, with ZYN seeing a 41.4% increase in U.S. shipments. The easing of supply-chain issues has further supported this growth. Additionally, the IQOS device has gained traction in markets like Japan, Europe, and Indonesia. As a result, Philip Morris's stock has seen a significant increase, with a current price of $131.41, marking a 10.47% rise.

Philip Morris Boosts Earnings Forecast, Shares Soar 10%

Philip Morris International Inc. (NYSE:PM) shares surged more than 10% intra-day today after the company raised its full-year earnings growth outlook following a stronger-than-expected third quarter, fueled by increased cigarette prices and robust sales from its ZYN nicotine pouch brand.

The tobacco giant saw its combustibles division achieve a 5.2% increase in net revenue for the quarter. This growth was driven by high single-digit pricing gains and steady demand within the industry.

ZYN, PMI’s popular nicotine pouch brand, experienced a surge in global shipments as supply chain issues eased and demand strengthened in the U.S. Shipments of ZYN cans jumped 41.4% year-over-year, reaching 149.1 million units.

PMI's IQOS heated tobacco division, a critical component of the company's strategy to diversify revenue, also saw a much-needed resurgence. After underperforming in recent quarters, IQOS showed "reacceleration" in adjusted in-market sales growth, giving investors renewed confidence in the product's long-term potential.

Total shipment volumes across all product categories increased by 2.9%, reaching 203 billion units. Adjusted diluted earnings per share climbed 14.4% to $1.91, outperforming analysts' expectations of $1.81.