Philip Morris International beat Wall Street expectations for quarterly profit, boosted by a let-up in soaring tobacco and labour costs and buoyant demand for its smokeless Zyn and IQOS products.
Philip Morris has also been reaping benefits from the higher pricing of its traditional combustible cigarettes, after supply-chain snags inflated freight and raw-material costs for tobacco companies last year.
Demand for higher-margin IQOS devices – that heat cigarettes, instead of lighting them – and Zyn nicotine pouches has helped protect margins for the tobacco giant.
Jacek Olczak, chief executive officer of Philip Morris International said. "Our strong business momentum continued with an excellent second quarter.
"Total cigarette and HTU shipment volume grew by 3.3%, underpinning double-digit growth in net revenues and currency-neutral adjusted diluted EPS."
The company raised the lower-end of its full-year profit forecast, and now expects earnings per share between $6.13 and $6.22, compared to its previous forecast of $6.10 and $6.22.
The company's second-quarter adjusted profit per share of $1.60 beat analysts' average estimates of a profit of $1.47, as per Refinitiv data.
Olczak added, "Our strong fundamentals give us further confidence as we enter the second half of the year, particularly as certain inflationary and operational pressures ease. [...]
"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." [Additional reporting by ESM]