Philip Morris International has reported a 10% year-over-year increase in second-quarter revenue, reaching $11.19 billion, which surpassed analyst expectations of $10.6 billion.
The company, trading as Philip Morris International Inc (NYSE: PM) with its stock up 2.25%, saw its quarterly earnings benefit from international expansion and strong sales of its Zyn product line in the United States.
The tobacco giant released its financial results on Wednesday, showing earnings per share of $1.80 for the quarter, compared to $1.95 in the same period last year.
On an adjusted basis, which excludes certain one-time items, earnings per share came in at $2.20. This exceeded the analyst consensus estimate of $2.03 compiled by FactSet.
Total quarterly revenue rose 10% to $11.19 billion, against analyst forecasts of $10.6 billion.
Sales from the company's smoke-free product category grew by 11.7%, while revenue from combustible tobacco products increased by 9.5%. Smoke-free products now account for 42% of total company revenue.
In the U.S. market, the Zyn nicotine pouch brand was a key sales driver, helping to offset pressure from a decline in cigar sales. Overall U.S. revenue saw a slight decrease of 0.7%. Shipments of Zyn pouches grew by 1.8% to 2.9 billion units, and the company expanded its Zyn product portfolio during the quarter.
Sales of smoke-free products in international markets surged by 14%. Growth in cigarette shipment volumes in Turkey, Indonesia, and Egypt helped counterbalance declines in other regions.
Philip Morris indicated that the ongoing conflict in the Middle East has so far had a limited direct impact on its business, primarily contributing to higher costs for transportation, energy, and other raw materials.
The company stated, "While several markets are experiencing higher energy prices and supply disruptions, these have not yet led to a significant change in consumer behavior."
For its full-year outlook, the company provided a midpoint guidance for adjusted earnings per share of $8.26, which is below the analyst consensus estimate of $8.36.