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Key Moments

  • Philip Morris International cut its full-year adjusted EPS outlook to a range of $8.26-$8.41, down from $8.31-$8.46.
  • Regulatory approval for certain Zyn nicotine pouches and the launch of Zyn Ultra underpin a stepped-up U.S. investment push.
  • Second-quarter revenue increased 10.4% to $11.19 billion, beating the $10.63 billion analyst estimate, while adjusted EPS rose 15.2% to $2.20.

Outlook Reduced Amid Competitive and Currency Headwinds

Philip Morris International (PMI) lowered its annual profit guidance for the third time this year, citing intensifying competition across tobacco and nicotine products along with the drag from adverse foreign exchange movements.

The maker of Marlboro outside the United States now projects full-year adjusted earnings per share of $8.26 to $8.41, narrowing and reducing its prior forecast of $8.31 to $8.46. On a basis that strips out currency effects, PMI maintained its adjusted EPS outlook of $8.11 to $8.26 per share.

The company noted that the strengthening U.S. dollar continues to pressure reported results, compounding challenges from rivals and pricing dynamics in its key markets.

Strategic Emphasis on Zyn Nicotine Pouches

Even as it contends with these headwinds, PMI is intensifying its focus on Zyn, a core component of its efforts to expand beyond traditional combustible tobacco. The company recently secured regulatory clearance enabling certain Zyn nicotine pouches to be marketed as less harmful than cigarettes.

The products are small oral pouches that users place under the lip to consume nicotine. While the U.S. Food and Drug Administration has issued a favorable ruling on some Zyn offerings, PMI is confronting stiffer competition and pricing pressures, raising questions about its ability to sustain a leading position in this category.

Portfolio Expansion and Pricing Strategy

In June, PMI rolled out Zyn Ultra, a higher-strength moist nicotine pouch. The product is priced below the company’s flagship Zyn offerings on a per-pouch basis, a move aimed at reinforcing its competitive stance against rival products, including British American Tobacco’s Velo.

To support the broadened Zyn lineup, PMI signaled a step-up in spending:

“To support the newly expanded Zyn portfolio, we intend to accelerate U.S. investments in the second half to maximize the long-term value of the brand,” the company said in a statement, adding that it plans to launch 1.5 mg and 8 mg variants of Zyn in the current quarter.

Financial Performance and Market Reaction

PMI reported that second-quarter revenue climbed 10.4% to $11.19 billion, surpassing analyst expectations of $10.63 billion based on data from LSEG.

Adjusted earnings per share for the quarter increased 15.2% to $2.20, including a 3 cent negative impact from currency. Analysts had been looking for $2.05 per share.

Despite the beat on both revenue and profit, PMI shares were down 1% in premarket trading.

Key Financial Metrics

MetricCurrent Period / GuidancePrevious / ConsensusNotes
Full-year adjusted EPS (reported)$8.26 – $8.41$8.31 – $8.46 (previous forecast)Third guidance cut this year
Full-year adjusted EPS (ex-currency)$8.11 – $8.26UnchangedExcludes FX impact
Q2 revenue$11.19 billion$10.63 billion (analyst estimate)Up 10.4% year-on-year
Q2 adjusted EPS$2.20$2.05 (analyst estimate)Up 15.2%; includes $0.03 FX headwind
Share price move (premarket)-1%N/AFollowing results and guidance update
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