Philip Morris posted record $11.4 billion in revenue as per-share earnings fell 4.9%

Philip Morris International reported record quarterly net revenue of $11.4 billion, up 5.5% from a year earlier, while reported diluted earnings per share fell 4.9% to $2.12.

The company said the drop in reported earnings per share stemmed from a non-cash fair value adjustment for equity security investments. Adjusted diluted earnings per share rose 5.4% to $2.36. Operating income climbed 14.1% to a record $4.9 billion and gross profit rose 6.7% to a record $7.9 billion.

Shipments rose 0.6% to 206.2 billion units, with volume for smoke-free products up 2.7%. Smoke-free net revenue grew 4.1% and contributed over 40% of the overall figure. Combustibles net revenue grew 6.4%, helped by pricing of 8.9% in the international combustibles segment.

Group CEO Jacek Olczak said in a statement that the company is on track for a sixth consecutive year of volume growth.

In the U.S., Zyn shipments came to 3.2 billion pouches, a gain of 4.2%. Segment net revenue rose 22.7%, while operating companies income fell 3.3% as commercial investment increased. The company plans to raise Zyn investment further in the fourth quarter, including an expanded advertising campaign and a move of most flagship products to 20-pouch cans from 15-pouch cans.

The company updated its full-year forecast for currency only. It expects reported diluted earnings per share of $7.11 to $7.26 and adjusted diluted earnings per share of $8.29 to $8.44, up 9.9% to 11.9% from $7.54 in 2025. The forecast includes a favorable currency impact of $0.18, down from $0.24 in the prior outlook. Excluding currency, the adjusted range is $8.11 to $8.26.

Last month's adjusted forecast was $8.35 to $8.50 per share, according to The Wall Street Journal.

The company projects organic operating income growth of 7% to 9% for the year, and sees the middle or lower half of that range as more probable. It cited costs tied to geopolitical tensions and higher U.S. growth investment. Energy-related inflation from the Middle East conflict added cost pressure in the third quarter, and the company assumes a slightly larger effect in the fourth quarter. Strikes in Ukraine have disrupted its supply chain and logistics, and the company expects an impact on operating income this year.

Adjusted earnings per share of $2.36 topped the $2.30 that analysts polled by FactSet expected, and revenue exceeded the $11.32 billion forecast, according to The Wall Street Journal.

Philip Morris stock slipped to $195 ahead of the market open, a decline of 2.5%.

The company raised its regular quarterly dividend 8.8% to $1.60 per share, or $6.40 annualized. Chief Financial Officer Massimo Andolina will host a conference call at 9 a.m. ET on Wednesday.