Marlboro parent Philip Morris International Inc. (NYSE: PM) saw its stock dip following its second-quarter fiscal year 2025 earnings report. Revenue increased by 7.1% year-over-year to $10.14 billion, slightly missing the analyst consensus estimate of $10.32 billion. However, adjusted earnings of $1.91 per share surpassed expectations.
A key highlight was the continued strong performance of Philip Morris’ smoke-free business, accounting for a significant portion of financials. Smoke-free products contributed 41% of total net revenues and over 42% of total gross profit. Shipment volumes of these products increased by 11.8%.
Philip Morris reported a reacceleration of HTU adjusted in-market sales volume and strong growth in the e-vapor category, particularly with the VEEV brand. The company is strategically shifting towards a smoke-free future, with a focus on profitability and long-term potential of its next-generation products.
Despite a focus on smoke-free alternatives, the combustibles business showed resilience with net revenues growing by 2.1%. Marlboro gained market share, achieving its highest quarterly market share since 2008. Philip Morris raised its fiscal year 2025 adjusted earnings per share outlook and projected strong growth in net revenue and operating income.
The company anticipates a decline in international industry volume for cigarettes and HTUs in 2025, excluding China and the U.S. Total cigarette and smoke-free product shipment volume growth is expected to be around 1%, with a 12-14% growth in smoke-free products. For the third quarter, adjusted earnings per share are expected to be $2.08-$2.13.
Philip Morris is investing heavily in next-generation products, but regulatory approval processes, like the U.S. FDA response to the IQOS ILUMA application, may introduce delays. Despite challenges, the company remains optimistic about the financial viability and long-term potential of its smoke-free offerings.
Read more at Yahoo Finance: Marlboro Parent Philip Morris International’s Smoke-Free Segment Powers Q2 Gains