Philip Morris Q4: Earnings Beat, Smoke-Free Sales Gain Ground & More

Philip Morris International Inc. PM shares are trading higher on Thursday after fourth-quarter FY24 earnings result.

The company reported revenue growth of 7.3% year-on-year to $9.71 billion, beating the analyst consensus estimate of $9.44 billion.

The smoke-free business accounted for 40% of the company’s total net revenues, up by 0.7pp versus the fourth quarter last year.

Cigarette and Heated Tobacco unit (HTU) shipment volume in fourth-quarter grew by 1.9% Y/Y, reflecting growth of 5.1% and 1.1% for HTUs and cigarettes respectively.

Adjusted EPS of $1.55 beat the consensus estimate of $1.50.

Adjusted operating margin for the quarter expanded from 33.7% to 36.3%, with $3.52 billion in adjusted operating income.

The company held $4.2 billion in cash and equivalents as of December-end. Net debt totaled $41.47 billion with a net debt to adjusted EBITDA ratio of 2.66.

The company declared a regular quarterly dividend of $1.35 per share, or an annualized $5.40 per share.

Jacek Olczak, Chief Executive Officer, said, “2024 was a remarkable year for PMI. We delivered very strong full-year results driven by the continued growth of IQOS and ZYN in addition to a robust combustibles performance.”

“The long-awaited U.S. FDA authorization of all ZYN nicotine pouches currently marketed in the U.S. is further evidence of the compelling science supporting smoke-free products.”

The ZYN nicotine pouches, small sachets containing nicotine meant to be placed between the gum and lip, are the first products of their kind to gain FDA approval.

Outlook: Philip Morris expects FY25 adjusted EPS of $7.04 – $7.17 versus an estimate of $7.03.

Philip Morris sees FY25 net revenue growth of around 6% to 8% on an organic basis, organic operating income growth of 10.5% to 12.5%.

The company sees FY25 capital expenditures of approximately $1.5 billion.

For the first-quarter, adjusted EPS is expected to be $1.58 – $1.63, with an estimate of $1.61.

Price Action: PM shares are trading higher by 9.86% at $143.90 at the last check Thursday.

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