Philip Morris International (NYSE:PM) lifted its annual earnings forecast on Tuesday, buoyed by robust demand for its smoke-free products, which helped drive record results for the third quarter. Shares rose more than 3% in premarket U.S. trading following the announcement.
Organic net revenues from the company’s smoke-free tobacco segment — a growing focus as consumers move away from traditional cigarettes amid health concerns and stricter regulations — climbed 13.9% year-over-year to $4.4 billion in Q3. This represented 41% of total revenue and 42% of gross profit, both higher than in the same period last year.
A major contributor to this performance was IQOS, the group’s flagship heated tobacco product, which continues to dominate the heat-not-burn category. Heated tobacco shipment volumes reached 40.8 billion units, beating the Bloomberg consensus forecast of 39.41 billion units.
Adjusted diluted earnings per share rose 17.3% from a year earlier to $2.24, while net revenues increased 5.9% to $10.8 billion. Both figures exceeded market expectations.
“Our global smoke-free portfolio is outgrowing the industry by a clear margin, driving positive total volumes, strong top-line growth and impressive margin expansion,” said CEO Jacek Olczak.
The company now expects full-year adjusted diluted EPS to range between $7.46 and $7.56, slightly above the previous guidance of $7.43 to $7.56, underscoring its confidence in sustained growth momentum for its smoke-free portfolio.