Philip Morris International Inc (NYSE:PM) has reported second-quarter earnings that beat expectations, boosted by strong sales of smoke-free alternatives including Swedish Match.
The Marlboro owner raised its stake in Swedish Match, which produces wet snuff snus products and tobacco-free nicotine ZYN pouches, to 93% last year, in a move away from cigarettes.
"The outstanding performance of Swedish Match – fueled by the growth of ZYN in the US – is accelerating our smoke-free transformation and is complementing IQOS in growing our smoke-free leadership, whilst we also deliver resilient combustibles performance with enhanced pricing,” CEO Jack Olczak said in a statement.
Total cigarette and heated tobacco units (HTU) volumes rose 3.3% to 188.4 billion over the three months to June 30, 2023, lead by a 27% increase in HTU shipments.
Net revenues for the period rose 10.5% to $9 billion on an organic basis, while Swedish Match delivered currency-neutral top-line growth of 19.1%.
Adjusted diluted earnings per share (EPS) for the quarter increased by 8% to $1.60 and were 17% higher in neutral currency. That was ahead of the $1.48 consensus estimate of eight analysts, according to Zacks Investment Research.
"Our strong fundamentals give us further confidence as we enter the second half of the year, particularly as certain inflationary and operational pressures ease,” Olczak added.
“We are therefore raising our full-year 2023 forecast for organic net revenue growth to a range of 7.5% to 8.5% and currency-neutral adjusted diluted EPS growth to a range of 8.0% to 9.5%."
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