Philip Morris International’s second-quarter 2026 filing shows a business still growing on the top line, but with earnings pressured by a large investment write-down and higher amortization.
For the six months ended June 30, 2026, net revenues rose 9.8% to $21.3 billion, up $1.9 billion from the prior-year period. Excluding currency and acquisitions/divestitures, net revenues increased 5.3%, driven mainly by favorable pricing, especially in international combustibles, partly offset by unfavorable volume and mix, led by lower international combustibles and U.S. volumes even as international smoke-free volumes increased.
For the quarter ended June 30, 2026, net revenues climbed 10.4% to $11.2 billion, an increase of $1.1 billion. Excluding currency and acquisitions/divestitures, quarterly net revenues were up 7.6%, again led by favorable pricing in international combustibles and supported by higher smoke-free volume/mix, despite weaker international combustibles mix.
Diluted EPS fell to $3.36 for the first half from $3.67 a year earlier, a decline of 8.4%. For the second quarter, diluted EPS dropped to $1.80 from $1.95, down 7.7%.
The biggest hit to first-half earnings was a $511 million non-cash impairment on PMI’s RBH equity investment, which reduced diluted EPS by $0.33 in the second quarter and $0.33 for the six-month period. PMI said the charge followed updated five-year projections from RBH reflecting current industry dynamics and a lower estimated fair value than carrying value.
Amortization of intangibles also weighed on results, at $503 million in the first half versus $496 million a year earlier. That translated to a $0.25 per-share drag in 2026, compared with $0.24 in 2025.
Currency helped first-half EPS by $0.22 per share, with the U.S. dollar’s movement against the euro and Russian ruble cited as the main driver, partly offset by the Japanese yen and Swiss franc. Higher interest income added $0.02 per share.
Operationally, PMI said first-half EPS improved by $0.21 per share. The company attributed that to: International Smoke-Free: favorable volume/mix and favorable pricing International Combustibles: favorable pricing, partly offset by unfavorable volume/mix U.S.: unfavorable volume/mix, unfavorable pricing, and higher manufacturing costs Higher marketing, administration and research costs
In the second quarter, operations contributed $0.19 per share to EPS, with the same broad pattern: strength in international smoke-free and combustibles offset by weakness in the U.S. segment.
PMI also recorded $30 million of restructuring charges in the first half of 2026, or $0.01 per share, tied to footprint optimization initiatives in the U.S. That compares with $243 million in restructuring charges in the first half of 2025, linked to the end of combustible tobacco production in two German factories.
A smaller positive item in the second quarter was an $18 million favorable sales tax settlement adjustment in Egypt, which added $0.01 per share after court approval of a 2016 settlement.
The company’s reporting structure changed effective January 1, 2026, with four geographic segments replaced by three reportable segments: International Smoke-Free, International Combustibles, and U.S., which includes the wellness business Aspeya. PMI said its smoke-free products were available in 109 markets as of June 30, 2026, and its cigarettes were sold in approximately 170 markets. As a result of these announcements, the company's shares have moved 2.36% on the market, and are now trading at a price of $195.625. If you want to know more, read the company's complete 10-Q report here.
