Philip Morris Q2 profits come in better than expected

(Sharecast News) - Philip Morris International reported better-than-expected profits for the second quarter on Thursday, as net earnings per share fell to $1.01 from $1.43 year-on-year. Excluding non-recurring items, earnings per share increased to $1.60 from $1.48, surpassing the consensus estimate of $1.50 according to FactSet.

PMI's revenue rose 14.5% to $8.97bn in the second quarter, beating market expectations for $8.67bn.

The company's cigarette sales saw a marginal decline of 0.4% to 157.01 billion units, while heated tobacco units (HTUs) saw a surge of 26.6%, to reach 31.42 billion units.

Revenue generated from smoke-free products, including HTUs, recorded an increase of 34.1% to $3.2bn.

Looking ahead, PMI said it expected full-year adjusted earnings per share to range between $6.13 and $6.22 - slightly short of the FactSet consensus estimate of $6.24.

The anticipated decline in total industry volume for cigarettes and HTUs, excluding China, was projected to be between 0.5% and 1.5%.

"Our strong business momentum continued with an excellent second quarter," said chief executive officer Jacek Kolchak.

"Total cigarette and heated tobacco unit (HTU) shipment volume grew by 3.3%, underpinning double-digit growth in net revenues and currency-neutral adjusted diluted earning per share.

"The outstanding performance of Swedish Match - fuelled by the growth of 'ZYN' in the US - is accelerating our smoke-free transformation and is complementing IQOS in growing our smoke-free leadership, whilst we also deliver resilient combustibles performance with enhanced pricing."

Olczak said the company's "strong fundamentals" gave it further confidence as it entered the second half of the year, particularly as certain inflationary and operational pressures eased.

"We are therefore raising our full-year 2023 forecast for organic net revenue growth to a range of 7.5% to 8.5% and currency-neutral adjusted diluted EPS growth to a range of 8.0% to 9.5%.

"As we look to the longer term, we are complementing our smoke-free transformation with the further development of our wellness and healthcare business.

"While we have experienced some initial headwinds, we remain committed to wellness and healthcare, with a focused strategy on several attractive growth opportunities."

At 1215 EDT (1715 BST), shares in Philip Morris International were up 0.16% at $98.83.

Reporting by Josh White for Sharecast.com.