Philip Morris International Inc. Achieves Record Growth In Smoke-free Products
$PM
Philip Morris International Inc. (NYSE:PM) has recently reported a significant uptick in its financial performance, primarily driven by robust sales in its smoke-free product division. The company’s strategic shift towards non-combustible alternatives is reshaping its revenue streams and positioning it as a leader in the tobacco industry’s transformation.
For the quarter ending December 2024, Philip Morris International reported a revenue of $9.71 billion, marking a 7.3% increase from the previous year. This growth exceeded analysts’ expectations, which had projected revenues around $9.44 billion. The earnings per share (EPS) also saw a notable rise, coming in at $1.55 compared to the anticipated $1.50, reflecting a 3.4% beat against consensus estimates.
The surge in revenue can largely be attributed to the company’s smoke-free products, which include the IQOS devices and ZYN nicotine pouches. Sales from the smoke-free sector grew by 9%, contributing to 40% of the total net revenues, up from 0.7 percentage points compared to the same quarter last year. Philip Morris’s operational income also saw a significant boost, with adjusted figures showing a 15.3% increase on an organic basis.
This growth is supported by improved pricing strategies and a positive volume/mix, which were slightly offset by increased marketing and research costs. The company’s ability to maintain operational efficiency while expanding into new markets and segments is a clear indicator of its robust business model. Looking ahead into 2025, Philip Morris has set an optimistic tone with its adjusted EPS forecast ranging between $7.04 and $7.17, suggesting a growth of approximately 7.2-9.1%.
This forecast is bolstered by expected increases in both cigarette and smoke-free product volumes, with particular emphasis on the US market where nicotine pouch shipments are projected to grow by 34-41%. Philip Morris International’s latest financial results reflect a successful strategic shift towards smoke-free products, aligning with global trends towards healthier lifestyle choices. As company continues to innovate and expand its product portfolio, it remains a key player to watch in the evolving landscape of global tobacco and nicotine consumption.
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