Smoke-free sales rise 4.1% as U.S. Zyn shipments reach 3.2 billion pouches
Philip Morris International reported net revenues of $11.4 billion for the third quarter, a 5.5% increase that exceeded the $11.32 billion forecast in Wall Street models.
Reported quarterly earnings were $2.12 a share, down from $2.23 a year earlier. Adjusted earnings were $2.36 a share, above the $2.30 expected by analysts polled by FactSet.
Philip Morris International attributed the decline in profit to inflationary pressures and stepped-up investment.
Sales across the company’s smoke-free business, which includes vapes and Zyn nicotine pouches, increased 4.1%. The business accounted for more than 40% of total net revenue during the quarter.
In the U.S., total Zyn shipments climbed 4.2% to 3.2 billion pouches. Philip Morris International attributed part of the increase to recent product launches, including new flavors and variants, and said it plans to further increase investments to support the brand in the current quarter.
Sales across Philip Morris International’s combustibles unit increased 6.4%. Overall shipments rose 0.6%, which the company attributed to a 2.7% increase in smoke-free products.
Philip Morris International now expects full-year earnings of $7.11 to $7.26 a share, or $8.29 to $8.44 on an adjusted basis. Last month, the company had guided to $7.28 to $7.42 in reported earnings and $8.35 to $8.50 on an adjusted basis. Analysts were looking for $7.79 a share and adjusted earnings of $8.40.
Shares fell 2.5% to $195 in premarket trading following the quarterly results.
A separate market-data listing showed Philip Morris International down 0.57%.
MSI previously reported that Philip Morris International’s smoke-free business grew 11.7% in the second quarter and accounted for 42% of revenue. In the third quarter, smoke-free sales growth slowed to 4.1%, while U.S. Zyn shipments increased to 3.2 billion pouches. The business remained more than 40% of revenue, and the company lowered its full-year earnings outlook.