Marlboro Maker Philip Morris Highlights Strong Q3 Performance On Higher Prices, Issues Upbeat Annual Forecast

On Tuesday, Philip Morris International Inc. PM stock is trading higher after the company reported better-than-expected third-quarter 2024 earnings.

The Marlboro maker reported third-quarter revenue of $9.91 billion, up 8.4% year over year, beating the consensus of $9.69 billion.

Net revenues increased by 11.6% on an organic basis, mainly reflecting a favorable pricing variance, primarily due to higher combustible tobacco pricing, and a favorable volume/mix, mainly driven by higher smoke-free product volume.

“In the third quarter, we delivered exceptionally strong performance, with record quarterly net revenues and earnings per share,” said Jacek Olczak, CEO.

“This reflects excellent momentum across all regions and categories, with a reacceleration in IQOS adjusted in-market sales growth, strong ZYN volumes, and resilient combustible performance,” the CEO added.

Also Read: Philip Morris Analyst Raises Forecasts Ahead Of Q3 Earnings, But ‘Consumer Elasticities Remain A Risk’

Quarterly shipments of smoke-free products reached close to 40 billion units. The smoke-free business accounted for 38% of total net revenues and 40% of gross profit, with net revenues increasing by 14.2% (16.8% organically) and gross profit increasing by 15.9% (20.2% organically).

The third-quarter total cigarette and Heated Tobacco unit (HTU) shipment volume grew by 2.6% year-over-year to 198.59 billion (HTU shipments increased by 8.9%, and cigarette shipments increased by 1.3%), with increases across all regions except the Americas Region.

Total oral product shipment volume in cans increased by 24.7%, predominantly reflecting growth in nicotine pouches.

Adjusted EPS reached $1.91, up 14.4%, beating the consensus estimate of $1.82 and management guidance of $1.77 – $1.82. Adjusted EPS excluding currency reached $1.97, up 18%.

Outlook: Philip Morris raised its fiscal year 2024 adjusted EPS outlook to $6.45-$6.51 from prior guidance of $6.33 – $6.45 versus the consensus of $6.41.

This forecast assumes Nicotine pouch shipment volume in the U.S. of 570 to 580 million cans, and net revenue growth of 7.5% to 9% on an organic basis.

Total cigarette, HTU, and oral smoke-free product shipment volume growth for PMI of 2% to 3% driven by smoke-free products.

The company expects organic operating income growth of 14% to 14.5%.

Price Action: At the last check Tuesday, PM stock was trading higher by 4.59% at $124.42.

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