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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%
Philip Morris
Philip Morris
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
- Wellness and Healthcare segment net revenues of around $300 million (including smoking cessation products), with an adjusted operating loss of around $150 million, primarily due to investments in research and development
- No share repurchases in 2023