PMI expects full-year adjusted earnings per share of between $6.67 and $6.79, compared with its previous forecast of $6.55 to $6.67. Second-quarter revenue of $9.47 billion topped the average analyst estimate of $9.18 billion, according to data compiled by LSEG.
Philip Morris International raised its annual profit forecast on Tuesday, taking into account higher cigarette prices and its growing nicotine pouch brand ZYN, while cutting its outlook for its core heated tobacco business.
The world’s largest tobacco company by market value has made heated tobacco device IQOS a central part of its bid to grow revenue from smoking alternatives. Unfortunately, lower-than-expected shipments last year disappointed some investors.
ZYN has emerged as a bright spot thanks to strong growth, while regular cigarette price increases have offset persistent volume declines in the sector.
PMI has raised its forecasts for both annual revenue and profit, with higher shipment volumes from ZYN a key factor.
“We are on track for a strong 2024,” said CEO Jacek Olczak, who pointed to strong momentum across PMI’s operations.
Shares of PMI rose 2% in pre-market trading after also beating expectations for second-quarter revenue.
IQOS and other heated tobacco products grew in users in the second quarter, with new product launches in countries including Japan and Indonesia driving 10.2% growth in market sales volume, in line with expectations.
However, PMI expected annual growth in heated tobacco sales in the market to be lower than previously forecast, suggesting that the European Union’s ban on flavoured heated tobacco will have a greater impact than expected.
Mark Giambrone, portfolio manager at Barrow Hanley, a sub-advisor of American Beacon’s Large Cap Value Fund that invests in PMI, said that didn’t overshadow the results and forecasts.
“It was an excellent quarter,” he said.
PMI expects full-year adjusted earnings per share of between $6.67 and $6.79, compared with its previous forecast of $6.55 to $6.67. Second-quarter revenue of $9.47 billion topped the average analyst estimate of $9.18 billion, according to data compiled by LSEG.
First print: Jul 23, 2024 | 11:18 PM IST