Philip Morris Q4 Earnings Beat Estimates, Revenues Grow 6.8% Y/Y

Philip Morris International Inc. PM reported fourth-quarter 2025 results, with both top and bottom lines increasing year over year. Net sales missed the Zacks Consensus Estimate, while earnings beat the same.

The company delivered another strong year in 2025, driven by sustained volume growth, robust top-line performance, and continued expansion of its smoke-free business. The company achieved its three-year operating income and EPS growth targets ahead of schedule and remains well-positioned to exceed its current growth outlook, reinforcing its capacity to generate sustainable long-term shareholder value.

Philip Morris posted quarterly adjusted earnings of $1.70, which increased 9.7% year over year. Excluding currency effects, the adjusted earnings jumped 9%. The bottom line beat the Zacks Consensus Estimate of $1.67.

Philip Morris International Inc. Price, Consensus and EPS Surprise

Philip Morris International Inc. price-consensus-eps-surprise-chart | Philip Morris International Inc. Quote

Net revenues of $10,362 million increased 6.8% on a reported basis and 3.7% on an organic basis. Revenues miss the Zacks Consensus Estimate of $10,428 million. The increase in organic revenues was backed by positive pricing variance (mainly driven by elevated combustible tobacco pricing) and favorable volume/mix (attributable to increased smoke-free product volumes), partially offset by lower cigarette volumes and an unfavorable cigarette mix.

PM’s Quarterly Performance: Key Metrics and Insights

During the fourth quarter, Philip Morris’ net revenues from combustible products grew 3.2% year over year and increased 0.3% organically.

Revenues from the smoke-free business increased 12% (up 8.6% on an organic basis) and 12.2% gross profit growth (8.3% organically). The smoke-free portfolio continued to gain traction, contributing more than 50% of net revenues in three of the four regions.

Total shipment volumes increased 0.1% to 193.8 billion units in the fourth quarter.

The adjusted operating income ascended 5.8% (up 4.5% on an organic basis) to $3,722 million, driven by improved pricing variance and a positive volume/mix, somewhat negated by increased marketing, administration and research costs.

Decoding PM’s Region-Wise Performance

Net revenues in the European region grew 11% (up 5.1% on an organic basis) to $4,598 million. This was a result of positive pricing variance and favorable volume/mix, partially offset by lower cigarette volumes and an unfavorable cigarette mix. Total HTU and cigarette shipment volumes in the region decreased 0.8% to 53.2 billion units.

In the SSEA, CIS & MEA regions, net revenues increased 8.4% (up 6.5% organically) to $3,109 million, primarily driven by favorable pricing, largely from higher combustible tobacco prices. This growth was partially offset by an unfavorable cigarette mix. Total cigarette and HTU shipment volume in the region rose 0.7% to 94.9 billion units.

In the EA, AU & PMI GTR regions, net revenues fell 0.6% (up 1% organically) to $1,425 million on favorable price variance. Total cigarette and HTU shipment volume in the region fell 2% to 22.9 billion units.

Revenues in the Americas fell 2.5% (down 4.4% on an organic basis) to $1,230 million primarily due to an unfavorable pricing comparison against a period of unusually low promotional activity for ZYN in the prior year, partially offset by a positive volume and mix effect from higher ZYN volumes. Total cigarette and HTU shipment volumes in the Americas decreased 2.6% to 16.9 billion units.

Philip Morris: Other Updates

The company ended the quarter with cash and cash equivalents of $4,872 million, long-term debt of $45,134 million and a total shareholder deficit of $8,028 million.

Philip Morris announced its quarterly dividend to $1.47 per share ($5.88 on an annualized basis). However, the company stated that it would not make share repurchases in 2026.

Here's What to Expect From PM in 2026

Adjusted EPS for 2026 is envisioned in the $8.38-$8.53 range, indicating 11.1-13.1% growth. Adjusted EPS, excluding currency, is likely to be in the $8.11-$8.26 band, indicating a year-over-year increase of 7.5-9.5%. For 2026, Philip Morris expects reported EPS in the band of $7.87-$8.02 compared with $7.26 in 2025.

The total international industry volume for cigarettes and HTUs (excluding China and the United States) is likely to decline nearly 2% in 2026. Total cigarette and SFP shipment volumes were broadly stable, supported by high-single-digit growth in SFP shipments, partly offset by an approximate 3% decline in cigarette shipments. The decline reflected weaker industry volumes in India and Mexico, as well as the ongoing recovery of the business in Turkey.

For 2026, PM expects net revenues to increase 5-7% on an organic basis. The operating income on an organic basis is likely to rise 7-9%.

Management expects an operating cash flow of around $13.5 billion in 2026. Capital expenditures are likely to be $1.4 to $1.6 billion, primarily implying investments to support the smoke-free business.

Shares of this Zacks Rank #3 (Hold) company have gained 21.4% in the past three months compared with the industry’s growth of 17.3%.

Stocks to Consider

Mama's Creations, Inc. MAMA manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 39.9% and 44.4%, respectively, from the year-ago figures. Mama's Creations delivered a trailing four-quarter earnings surprise of 133.3%, on average.

The Hershey Company HSY engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. It flaunts a Zacks Rank #2 (Buy) at present. HSY delivered a trailing four-quarter earnings surprise of 15%, on average. 

The Zacks Consensus Estimate for Hershey’s current fiscal-year sales implies growth of 3.6%, from the year-ago figures.

The Simply Good Foods Company SMPL, a consumer-packaged food and beverage company, engages in the development, marketing, and sale of snacks and meal replacements, and other products in North America and internationally. It flaunts a Zacks Rank #2 at present. SMPL delivered a trailing four-quarter earnings surprise of 5.5%, on average. 

The Zacks Consensus Estimate for Simply Good Foods’ current fiscal-year earnings implies growth of 1.6%, from the year-ago figures.

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