Philip Morris International Q2 Revenues Hit $11.2 Billion

By Philip Seaworth • Wednesday, July 22 10:57 • Permanent Link

Philip Morris International said second-quarter net revenues rose 10.4% to $11.2 billion, topping the $11 billion mark for the first time, as higher pricing and volume gains lifted results across both smoke-free and combustible products.

Adjusted diluted earnings per share climbed 15.2% to $2.20 from $1.91 a year earlier, or 13.6% excluding currency. Reported diluted EPS fell 7.7% to $1.80 from $1.95, hit by a $511 million non-cash impairment tied to the RBH equity investment.

Gross profit increased 11.5% to $7.7 billion, while operating income rose 22.0% to $4.5 billion. Shipments grew 2.5% to 205.2 billion equivalent units.

The smoke-free business was the main growth driver. Its net revenues rose 14.2% to $3.9 billion, while gross profit advanced 17.1% to $2.7 billion. Smoke-free products made up about 42% of total net revenues in the quarter, up 0.5 percentage point from a year earlier.

Within smoke-free, heat-not-burn shipments increased 7.6% to 41.8 billion units. Oral smoke-free product volume fell 7.0% to 5.1 billion equivalent units, while e-vapor shipments jumped 55.1% to 1.3 billion.

In combustibles, net revenues increased 9.8% to $6.5 billion and gross profit rose 11.5% to $4.4 billion. Cigarette volume edged up 1.1% to 156.9 billion units, and Marlboro’s category share reached a record 11.0%, up 0.3 percentage point.

In the U.S., net revenues declined 0.7% to $856 million. Zyn shipments rose 1.8% to 2.9 billion pouches, and the company said it began shipping Zyn Ultra in June.

For the first six months, net revenues increased 9.8% to $21.3 billion, gross profit rose 10.9% to $14.6 billion, and operating income climbed 16.1% to $8.4 billion. Adjusted diluted EPS for the half-year was $4.16, up 15.6% from $3.60, while reported diluted EPS fell 8.4% to $3.36 from $3.67.

The company raised its full-year adjusted diluted EPS outlook to $8.26 to $8.41, from $7.54 a year earlier, and said the range excluding currency is $8.11 to $8.26. As a result of these announcements, the company's shares have moved 3.49% on the market, and are now trading at a price of $194.595. For more information, read the company's full 8-K submission here.

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