Philip Morris (PM) Q3 2023 results

Marlboro brand cigarettes from Philip Morris International are arranged for a photo on October 2, 2015 in Shelbyville, Kentucky.

Luke Sharrett | Bloomberg | Getty Images

Philip Morris International reported quarterly profit Thursday that beat Wall Street expectations but revenue that fell short of estimates as sales for its heated tobacco and oral nicotine products remained strong.

Here’s what the company reported compared to Wall Street’s expectations, based on an analyst survey from LSEG, formerly known as Refinitiv:

  • Earnings per share: $1.67 adjusted vs. $1.62 expected
  • Revenue: $9.14 billion vs. $9.17 billion

The tobacco company, which makes Marlboro cigarettes, raised its full-year adjusted profit forecast to $6.05 to $6.08 per share, which would represent growth of 10 percent to 10.5 percent.

For the quarter ended September 30, Philip Morris reported revenue of $9.14 billion, compared to year-ago revenue of $8.03 billion, an increase of 13.8%.

Meanwhile, the company’s operating income rose to $3.37 billion, an increase of 13.5%.

CEO Jacek Olczak said the quarter was the first time the company had quarterly net sales of over $9 billion. He cited IQOS, the line of heated tobacco products and the oral nicotine pouch Zyn as growth drivers.

In recent years, Philip Morris has shifted away from its core market of traditional cigarettes as demand for combustible tobacco products declines and regulation tightens in some markets. Instead, the company advocates for smoke-free products and respiratory medications.

Shipment volumes of heated tobacco, which includes electronic cigarettes, rose 18% in the quarter.

While traditional cigarette shipment volume fell 0.5%, net sales in the category increased 4.3% due to higher prices.

The company’s Zyn nicotine pouches division reported a 65.7% increase in shipment volumes. Olczak said it “exceeded our expectations once again.”

Zyn nicotine pouches are tobacco-free oral products that the company touts as a cleaner, more discreet way to consume nicotine. This is part of the company’s growing efforts to focus more on health care and wellness, despite opposition from the larger public health sector over the harm caused by cigarette smoking.

Philip Morris acquired Zyn last year with its purchase of Swedish Match. It was one of several deals aimed at diversifying the portfolio away from cigarettes.

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