Philip Morris International Beats Q3 Estimates, Raises Annual Profit Forecast
A strong performance in the third quarter has led Philip Morris International (PM) to raise its annual profit forecast, driven by higher prices and robust demand for its smokeless products. The company’s flagship heated tobacco device, IQOS, and ZYN nicotine pouches have been key contributors to this growth.
Smokeless Products Drive Growth
The growing preference for smokeless alternatives to traditional combustible cigarettes and chewing tobacco products in the United States has supported demand for ZYN, which does not contain tobacco. To meet this demand, Philip Morris has been investing in expanding production capacity for ZYN, resulting in a 41.4% increase in U.S. shipments in the quarter.
Global Growth
IQOS also saw strong growth in regions such as Japan, Europe, and Indonesia, contributing to the company’s consolidated shipment volumes for cigarettes rising 1.3% in the quarter. This growth is a testament to the company’s efforts to diversify its product portfolio and adapt to changing consumer preferences.
Revenue and Profit Beat Estimates
Philip Morris reported revenue of $9.91 billion for the third quarter, beating analysts’ estimates of $9.69 billion. Its quarterly adjusted profit of $1.91 per share also exceeded estimates of $1.82 per share. The company now expects its 2024 adjusted earnings per share, excluding currency, to be between $6.85 and $6.91, up from its prior range of $6.67 to $6.79.
Settlement of Canadian Lawsuit
Last week, Philip Morris, along with peers British American Tobacco and Japan Tobacco, agreed to pay C$32.5 billion ($23.6 billion) to settle a long-running lawsuit in Canada. The Quebec court awarded damages to about 100,000 smokers and ex-smokers who claimed these companies failed to adequately warn consumers about cancer risks.
Shares Rise
Following the announcement, shares of Philip Morris were up nearly 3% in premarket trading, reflecting investor confidence in the company’s growth prospects and ability to adapt to changing market trends.
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