Earnings
Philip Morris posts record $11.4bn quarter but shifts several 2026 assumptions
Revenue grew 7.1% organically and the dividend rose 8.8%, while the company trimmed its currency benefit and signalled operating income growth is now more likely in the middle or lower half of its range.
HedgeWeekly News Desk ·
Philip Morris International reported third-quarter net revenues of $11.4 billion on Wednesday, a quarterly record, up 5.5% on a reported basis and 7.1% organically, with pricing the main driver. Smoke-free products accounted for more than 40% of revenue in the quarter and about 42% year to date.
Reported diluted earnings per share fell 4.9% to $2.12, which the company attributed mainly to a non-cash fair value adjustment on equity securities. Adjusted diluted EPS rose 5.4% to $2.36, or 5.8% excluding a one-cent currency drag. Total shipments rose 0.6% to 206.2 billion units: cigarettes were flat at 158.0 billion, IQOS heated-tobacco units rose 1.5% to 41.5 billion and U.S. ZYN shipments grew 4.2% to 3.2 billion pouches.
The company set 2026 adjusted diluted EPS at $8.29 to $8.44, up 9.9% to 11.9% from $7.54 in 2025, and reported EPS at $7.11 to $7.26. The headline update was currency, with the expected benefit cut to $0.18 a share from $0.24. PMI also raised its quarterly dividend 8.8% to $1.60 and said it plans no share buybacks in 2026.
Why it matters: the release frames the revision as currency-only, but its assumptions list shows wider changes. Organic operating income growth of 7% to 9% is now seen in the middle or lower half of the range, citing geopolitical cost pressure tied to the Middle East conflict and higher U.S. investment, while organic revenue growth of 5% to 7% is seen in the middle or upper half. Cigarette volumes are now expected to fall at roughly the year-to-date pace of 1.2%, milder than the 2% to 3% decline assumed before. For investors, the mix points to steadier top-line growth but tighter margins in the fourth quarter, when ZYN spending rises as most flagship products move to 20-pouch cans.