Philip Morris loses ground at the start of trading despite better quarterly results �

Philip Morris International (PM.US) has published its results for the third quarter of 2025, once again clearly exceeding analysts' expectations in terms of both profit and revenue. The company continues to consistently transform its business towards reduced-risk (smoke-free) products, mainly through the dominance of IQOS and strong sales growth of ZYN in the United States. However, the company's share price is mixed before the stock market opens. Despite initial gains of up to 3%, the company's shares are currently trading nearly 1.5% lower than yesterday's close. This may indicate that despite the strong results, investors had expected them and largely priced them in earlier.

In the third quarter, Philip Morris reported revenues of $10.85 billion (consensus: $10.68 billion), and adjusted earnings per share (EPS) of $2.24 (forecast: $2.09–2.11), representing increases of 9.4% and 17.3% year-on-year, respectively—excluding the currency effect, EPS improved by 13.1%. The smoke-free segment now accounts for 41% of revenue and over 42% of gross profit, with smoke-free product shipments up 16.6% and organic revenue growth of 13.9%. The company raised its quarterly dividend by 8.9% to USD 1.47 per share, leaving the recalibration of its buyback policy until future quarters.

Philip Morris confirms its status as a global industry leader, exceeding expectations in terms of revenue, margins, and portfolio transformation efficiency – the coming quarters will be under pressure to meet the targets set for the smoke-free business and maintain a high rate of conversion to reduced-risk products.

Philip Morris forecasts for 2025:

• Adjusted EPS for the full year: $7.46–7.56 (previously $7.43–7.56)
• Expected organic revenue growth for 2025: +8% (market forecast +7.47%)
• ZYN US sales volume (nicotine pouches): 800-840 million cans (+38-45% y/y)
• CAPEX: $1.6 billion, mainly for smoke-free product development
• Expected organic operating profit growth: 11-12.5%
• Debt to EBITDA ratio: further improvement towards 2x by the end of 2026
• No share buybacks throughout 2025
• Higher effective tax rate: 22-23%
• Expected continued dynamic expansion of IQOS and ZYN, with a significant focus on the EU, Japan, and the US

Despite strong results, the company's shares are losing ground just before the opening of Wall Street. The price is falling below the 200-day EMA, which has so far been a key support point for the long-term upward trend.

Source: xStation