Philip Morris International (PMI) has raised its annual profit forecast as third-quarter earnings beat expectations thanks to higher cigarette prices, demand for its heated tobacco products, and rapid growth of its oral nicotine product ZYN.
While cigarettes still make up the vast majority of PMI's sales, the world's top tobacco company by market value has sought to counter stricter regulations and falling demand for its traditional products in some markets via a shift into smoking alternatives.
Shipments of oral nicotine products like ZYN, which PMI acquired via the purchase of oral nicotine company Swedish Match last year, more than doubled compared to a year earlier. While cigarette shipment volumes were down 0.5%, this was offset by a 9% increase in prices.
Performance Surpasses Expectations
PMI chief executive Jacek Olczak said that the company had surpassed $9 billion in quarterly net revenues for the first time and its quarterly adjusted earnings per share of $1.67 were also a record.
The company now expects adjusted annual profit of between $6.05 and $6.08 per share, compared to its earlier forecast of $5.96 to $6.05 per share.
It reported third quarter adjusted profit of $1.67 per share. Analysts on average had expected a profit of $1.61 per share, according to LSEG data.
While this also beat PMI's own guidance range, the company's third quarter revenues were slightly behind analyst expectations of $9.17 billion.
Last month, the company announced plans to launch IQOS in two US states in 2024, as part of its efforts to shift away from cigarettes.