July 22, 2026

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Philip Morris International Inc. (NYSE: PM) reported second-quarter 2026 results above expectations, supported by higher net revenues, strong adjusted earnings growth, smoke-free product momentum, and continued pricing strength in combustibles.
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Philip Morris International is a global consumer goods company focused on cigarettes and smoke-free products, including heat-not-burn, nicotine pouch, and e-vapor products.
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The company reported adjusted EPS of $2.20, above estimates of $2.04, representing a 7.8% earnings surprise. Net revenues increased 10.4% to $11.2 billion.

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Results Beat Expectations

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Philip Morris reported diluted EPS of $1.80, down 7.7% from the prior-year quarter.
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Adjusted diluted EPS increased 15.2% to $2.20.
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Excluding currency, adjusted diluted EPS increased 13.6%.
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Net revenues increased 10.4% to $11.2 billion, or 7.6% on an organic basis.
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Gross profit increased 11.5%, while operating income increased 22.0%.
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Management said the quarter marked the first time Philip Morris generated more than $11 billion in quarterly net revenue.

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Smoke-Free Products Drove Growth

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Smoke-free products accounted for about 42% of total net revenues.
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Smoke-free net revenue increased 11.7%, or 9.7% organically.
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International smoke-free net revenue increased 14.2%, driven by 8.0% volume growth.
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IQOS continued to be the main growth driver, with heat-not-burn shipment volumes up 7.6%.
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The company said smoke-free products are now available in 109 markets.

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Combustibles Remained Resilient

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International combustibles net revenue increased 9.8%, or 6.4% organically.
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Cigarette volume increased 1.1%, with growth in markets such as Turkey, Indonesia, and Egypt offsetting declines elsewhere.
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Philip Morris said combustible revenue growth was driven by strong pricing, partly offset by geographic mix.
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Marlboro gained share, matching its record category share of 11.0%.

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U.S. ZYN Trends Improved Sequentially

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The U.S. segment showed sequential improvement after a weaker first quarter.
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ZYN shipments increased 1.8% to 2.9 billion pouches.
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Philip Morris said ZYN offtake volumes were flat to slightly higher year-over-year in a growing category.
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The company expanded the ZYN portfolio with ZYN ULTRA and additional flavors in the dry flagship lineup.
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The FDA also granted Modified Risk Tobacco Product authorization to 20 ZYN variants during the quarter.

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Guidance Updated for Currency

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Philip Morris forecast full-year 2026 reported diluted EPS of $7.19 to $7.34.
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Adjusted diluted EPS is expected to range from $8.26 to $8.41.
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Excluding currency, adjusted diluted EPS is expected to range from $8.11 to $8.26, representing growth of 7.5% to 9.5%.
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The company expects organic net revenue growth of 5% to 7% and organic operating income growth of 7% to 9%.
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Philip Morris also expects operating cash flow of around $13.5 billion and capital expenditures of $1.4 billion to $1.6 billion, mostly supporting the smoke-free business.

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The Bigger Picture

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Philip Morris delivered a strong quarter despite pressure from currency and one-time items.
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Adjusted EPS beat expectations, net revenue crossed $11 billion, smoke-free products continued growing, and combustibles remained resilient due to pricing. The company also maintained its full-year outlook aside from currency changes.
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The key question is whether smoke-free growth, especially IQOS and ZYN, can keep offsetting regulatory pressure, category shifts, and currency headwinds.
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