Strong quarterly results overshadowed by softer third-quarter outlook
Philip Morris International Inc. (NYSE:PM) reported better-than-expected second-quarter 2026 results on Wednesday, but investors focused on weaker-than-anticipated third-quarter earnings guidance, sending the stock modestly lower.
The tobacco company posted adjusted earnings per share of $2.20, comfortably ahead of the analyst consensus estimate of $2.03.
Revenue reached a record $11.2 billion, exceeding Wall Street expectations of $10.6 billion and increasing 10.4% from the same period last year.
Despite the earnings beat, shares edged lower after management forecast third-quarter adjusted earnings per share of between $2.20 and $2.25. The midpoint of $2.225 fell below the analyst consensus estimate of $2.43.
Smoke-free products continue to drive growth
“We delivered outstanding results in the second quarter, driving net revenues to over $11 billion for the first time with excellent growth across all headline metrics,” said Jacek Olczak, Group CEO.
The company’s smoke-free business remained its primary growth engine, with revenue increasing 11.7% year over year.
Revenue from combustible tobacco products also advanced 9.5%, contributing to the company’s record quarterly sales.
Adjusted earnings per share rose 15.2% from $1.91 in the second quarter of 2025, or 13.6% excluding a favourable three-cent currency benefit.
Reported diluted earnings per share declined 7.7% to $1.80 after Philip Morris recorded a non-cash impairment charge of $511 million related to its RBH equity investment.
IQOS and smoke-free volumes remain strong
Total shipment volume increased 2.5% during the quarter, supported by a 7.5% increase in smoke-free product shipments.
The international smoke-free segment delivered revenue growth of 14.2%, driven by 8.0% volume growth.
IQOS heat-not-burn products continued to lead the category, although the company noted softer market conditions in Japan and Poland.
Full-year outlook maintained
Philip Morris reaffirmed its full-year 2026 adjusted earnings guidance of $8.26 to $8.41 per share, representing growth of 9.5% to 11.5% compared with 2025.
Excluding currency movements, the company expects adjusted earnings growth of 7.5% to 9.5%.
Management also updated its estimated currency benefit for the year to $0.15 per share, down from the previous forecast of $0.20.
The company continues to expect organic net revenue growth of 5% to 7% and organic operating income growth of 7% to 9% for the full year.
Philip Morris International stock price
