Philip Morris Q3 revenue up 5.5% on smoke-free, combustible growth

Tobacco major Philip Morris International (PMI) reported a 5.5% YoY rise in Q3 net revenues to USD 11.4 billion. The growth was driven by both its smoke-free and combustible product segments, with total shipments increasing by 0.6%.

Tobacco major Philip Morris International (PMI) reported a 5.5 per cent YoY rise in net revenues to USD 11.4 billion in Q3, driven by growth in both smoke-free and combustible products, as per a company statement.

As per the release, PMI’s total shipments rose 0.6 per cent during the quarter, supported by a 2.7 per cent increase in smoke-free product (SFP) shipments across all categories. This was backed by high single-digit growth in adjusted in-market sales of smoke-free products. The combustible products segment also remained resilient, particularly in markets where smoke-free products are banned or have limited availability.

CEO Statement and Performance Overview

"We delivered another excellent quarter, with growing total volumes, double-digit organic operating income growth and robust margin expansion," said Jacek Olczak, Group CEO PMI.

Financial Performance Breakdown

Revenue by Product Segment

Revenues from smoke-free products increased 4.1 per cent, while the combustible products segment recorded 6.4 per cent growth. Smoke-free products, which are now available in 110 markets, contributed over approximately 42 per cent in the year-to-date period.

Profitability and Earnings

On the other hand, the company’s gross profit increased 6.7 per cent, supported by higher combustible product pricing and benefits from scale and product mix. Operating income rose 14.1 per cent during the quarter. Meanwhile, reported diluted EPS of USD 2.12 declined by 4.9 per cent, mainly due to the non-cash fair value adjustment for equity security investments. Adjusted diluted EPS grew by 5.4 per cent, or by 5.8 per cent excluding a one cent unfavorable currency impact to reach USD 2.36, marking “another quarterly all-time high,” the company said in the release.

International Smoke-Free Segment Performance

In the international smoke-free segment, net revenues increased 0.7 per cent, with organic growth of 3.4 per cent, driven by a 2.7 per cent rise in volumes. Adjusted in-market sales growth accelerated to 8 per cent, despite a challenging comparison for heated tobacco units (HTUs) due to differences in shipment timing, particularly in Japan. In this segment, gross profit rose 0.8 per cent, reflecting organic growth of 3.3 per cent.

Shareholder Returns

The company also raised its regular quarterly dividend by 8.8 per cent to USD 1.60 per share, equivalent to an annualised dividend of USD 6.40 per share. (ANI)

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