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Sep 30, 2023
Philip Morris Q3 2023 Earnings Report
Delivered strong third-quarter performance with record adjusted diluted EPS, driven by IQOS and ZYN growth.
Key Takeaways
Philip Morris International reported a strong third quarter, surpassing $9 billion in net revenues for the first time and generating a record quarterly adjusted diluted EPS of $1.67, representing currency-neutral growth of 20.3%. The performance was driven by strong IQOS performance, resilient combustible trends, and the exceptional growth of ZYN.
Reported net revenues up by 16.4%, excluding currency
Combustible tobacco net revenue growth of 4.3%; growth of 6.2% on an organic basis, driven by pricing of 9.0%
Market share for HTUs in IQOS markets up by 1.2 points to 9.0%
Adjusted in-market sales volume for HTUs, which excludes the net unfavorable impact of estimated distributor and wholesaler inventory movements, up by an estimated 14.4%
Forward Guidance
PMI is raising its full-year growth outlook for adjusted diluted EPS to a range of 10.0% to 10.5%, excluding currency.
Positive Outlook
- Total cigarette and HTU shipment volume growth for PMI of 1.0% to 1.5%
- Nicotine pouch shipment volume of 390 to 410 million cans, reflecting the continued outstanding growth of ZYN in the U.S.
- Cigarette shipment volume decline of approximately 1.0% to 2.0%
- Net revenue growth of around 8.0% on an organic basis
- Lower supply chain costs (primarily related to Japan)
Challenges Ahead
- An estimated total international industry volume decline for cigarettes and HTUs, excluding China and the U.S., of 1.5% to 2.0%
- HTU shipment volume within the lower half of the company's previous 125-to-130-billion-unit range
- An adjusted operating income margin decline of 50 to 150 basis points on an organic basis, with the decline likely toward the upper (150 basis point) end of the range
Historical Earnings Impact
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