Philip Morris beats on earnings but stock edges lower on weak guidance

Investing.com -- Philip Morris International Inc. (NYSE: PM) reported second-quarter earnings and revenue that topped consensus expectations on Wednesday, however, shares have edged lower after the company's Q3 earnings guidance missed the consensus estimate.

Adjusted earnings per share of $2.20 surpassed the analyst consensus of $2.03 by $0.17, while revenue of $11.2 billion exceeded expectations of $10.6 billion.

The tobacco company's second-quarter revenue climbed 10.4% YoY, marking the first time quarterly net revenues exceeded $11 billion. The smoke-free business drove growth with revenue up 11.7%, while combustibles revenue rose 9.5%. For the third quarter, Philip Morris expects adjusted EPS of $2.20 to $2.25, with a midpoint of $2.225 falling well below the analyst consensus of $2.43.

"We delivered outstanding results in the second quarter, driving net revenues to over $11 billion for the first time with excellent growth across all headline metrics," said Jacek Olczak, Group CEO.

Adjusted EPS grew 15.2% from $1.91 in the prior-year quarter, or 13.6% excluding a favorable 3-cent currency impact. Reported diluted EPS of $1.80 declined 7.7% due to a non-cash impairment charge of $511 million related to the company's RBH equity investment.

Total shipment volume increased 2.5%, driven by a 7.5% rise in smoke-free products. The international smoke-free segment posted 14.2% revenue growth, fueled by 8.0% volume growth. IQOS heat-not-burn products continued to lead the category, though the company faced headwinds in Japan and Poland.

For the full year 2026, Philip Morris maintained its adjusted EPS forecast of $8.26 to $8.41, representing growth of 9.5% to 11.5% versus 2025. Excluding currency, the forecast implies growth of 7.5% to 9.5%. The company updated its currency impact estimate to $0.15 from $0.20 previously.

The company expects full-year net revenue growth of 5% to 7% on an organic basis and organic operating income growth of 7% to 9%.

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