Philip Morris Q3 Net Revenue Rises 5.5% as Smoke-Free Sales Grow

Philip Morris International lifted third-quarter net revenue 5.5% to $11.438 billion as both smoke-free and combustible tobacco revenue increased year over year for the quarter ended Sept. 30.

Total net revenue rose 7.1% on an organic basis. Smoke-free shipments increased 2.7% to 48.2 billion equivalent units, while smoke-free net revenue grew 4.1% to $4.625 billion. The category generated more than 40% of quarterly net revenue and grew 6.3% on an organic basis.

Smoke-free products include heat-not-burn, e-vapor and oral smokeless products. Heat-not-burn shipments rose 1.5%, while e-vapor shipments climbed 61.6%. International modern oral volume increased 20.6% to 0.5 billion pouches. U.S. ZYN pouch shipments totaled 3.2 billion, a separate figure from international modern oral volume.

Combustible tobacco net revenue reached $6.812 billion, up 6.4% from a year earlier and 7.7% on an organic basis. The total included $6.725 billion in international revenue and $87 million in U.S. revenue. International combustible revenue rose 6.5%, with pricing up 8.9% as cigarette shipments stayed broadly flat.

Changes to distribution terms in some markets also benefited the quarter. Philip Morris does not expect that contribution to recur at the same level in future quarters.

Reported diluted earnings per share fell 4.9% to $2.12, while adjusted diluted EPS rose 5.4% to $2.36. The adjusted figure exceeded the company’s earlier third-quarter EPS forecast of $2.29 to $2.34.

“We delivered another excellent quarter, with growing total volumes, double-digit organic operating income growth and robust margin expansion,” Group CEO Jacek Olczak said.