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Philip Morris Q1 Earnings Beat Estimates, Revenues Up 9.1% Y/Y
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Key Takeaways
PM reported Q1 EPS of $1.96, up 16% YoY, with revenues rising 9.1% to $10.1B.
PM saw strong smoke-free growth, driven by higher HTU and e-vapor volumes and favorable pricing.
PM expects 2026 EPS growth of up to 12.9% and 5-7% organic revenue growth, backed by smoke-free investments.
Philip Morris International Inc. (PM - Free Report) reported first-quarter 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
The company delivered a strong first-quarter performance, driven by robust IQOS growth and solid momentum in the smoke-free business, positioning it to sustain strong earnings growth and deliver leading performance in 2026.
Philip Morris posted quarterly adjusted earnings of $1.96 per share, which increased 16% year over year. Excluding currency effects, the adjusted earnings jumped 5.3% year over year. The bottom line beat the Zacks Consensus Estimate of $1.82.
Philip Morris International Inc. Price, Consensus and EPS Surprise
Net revenues of $10,146 million increased 9.1% on a reported basis and 2.7% on an organic basis year over year. Revenues beat the Zacks Consensus Estimate of $9,826 million. The increase in organic revenues was backed by favorable pricing, led by international combustibles. This growth was partly offset by an unfavorable volume/mix, reflecting lower international combustibles and U.S. volumes, despite higher international smoke-free volumes.
PM’s Quarterly Performance: Key Metrics and Insights
Total shipment volumes decreased 1.9% to 184.3 billion units in the first quarter.
Adjusted gross profit increased 10.1% (up 3.8% on an organic basis) to $6,911 million, while operating income rose 9.8% (up 0.9% on an organic basis) to $3,893 million.
Decoding PM’s Segment Performance
Net revenues in the International Smoke-Free segment grew 24.7% (up 15.8% on an organic basis) to $3,836 million, driven by favorable volume/mix from higher HTU and e-vapor volumes, along with higher HTU pricing. Adjusted gross profit rose 28.6% (up 19.4% organically). Shipment volume grew 11.9% to 44.1 billion units, led by Italy, Global Travel Retail, Taiwan and Russia.
In the International Combustibles segment, net revenues increased 6.8% (up 1% organically) to $5,688 million, as favorable pricing and distribution-related impacts more than offset an unfavorable volume/mix. Adjusted gross profit increased 9.8% (up 3.9% organically). Shipment volume declined 5.1% to 137.3 billion units, with notable decreases in Indonesia, Russia, Germany and Mexico.
Revenues in the U.S. segment fell 30.8% (down 31.6% on an organic basis) to $622 million, reflecting lower ZYN volumes due to distributor and trade inventory movements, as well as an unfavorable pricing comparison from lower prior-year promotional activity. Adjusted gross profit decreased 44.1% organically. Shipment volume declined 21.2% to 2.8 billion units.
Philip Morris: Other Updates
The company ended the quarter with cash and cash equivalents of $5,450 million, long-term debt of $43,808 million and a total shareholder deficit of $7,300 million.
Sneak Peek Into PM’s Outlook
Adjusted EPS for 2026 is envisioned in the $8.36-$8.51 range, indicating 10.9-12.9% growth. Adjusted EPS, excluding currency, is likely to be in the $8.11-$8.26 band, indicating a year-over-year increase of 7.5-9.5%. For 2026, Philip Morris expects reported EPS in the band of $7.56-$7.71 compared with $7.26 in 2025.
The total international industry volume for cigarettes and HTUs (excluding China and the United States) is likely to decline nearly 2% in 2026. Total cigarette and SFP shipment volumes were broadly stable, supported by high-single-digit growth in SFP shipments, partly offset by an approximate 3% decline in cigarette shipments.
For 2026, PM expects net revenues to increase 5-7% on an organic basis. The operating income on an organic basis is likely to rise 7-9%.
Management expects an operating cash flow of around $13.5 billion in 2026. Capital expenditures are likely to be in the band of $1.4 billion to $1.6 billion, primarily implying investments to support the smoke-free business.
For the second quarter of 2026, adjusted EPS is projected in the range of $2.02 to $2.07.
Shares of this Zacks Rank #3 (Hold) company have fallen 9.9% in the past three months compared with the industry’s decline of 9%.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 29.8% and 66.7%, respectively, from the year-ago figures. Mama's Creations delivered a trailing four-quarter earnings surprise of 125%, on average.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2. US Foods Holding delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.4% and 20.9%, respectively, from the year-ago figures.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It currently has a Zacks Rank #2. Tyson Foods delivered a trailing four-quarter earnings surprise of 16.5%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales indicates growth of 4.4%, from the prior-year reported levels.
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Philip Morris Q1 Earnings Beat Estimates, Revenues Up 9.1% Y/Y
Key Takeaways
Philip Morris International Inc. (PM - Free Report) reported first-quarter 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
The company delivered a strong first-quarter performance, driven by robust IQOS growth and solid momentum in the smoke-free business, positioning it to sustain strong earnings growth and deliver leading performance in 2026.
Philip Morris posted quarterly adjusted earnings of $1.96 per share, which increased 16% year over year. Excluding currency effects, the adjusted earnings jumped 5.3% year over year. The bottom line beat the Zacks Consensus Estimate of $1.82.
Philip Morris International Inc. Price, Consensus and EPS Surprise
Philip Morris International Inc. price-consensus-eps-surprise-chart | Philip Morris International Inc. Quote
Net revenues of $10,146 million increased 9.1% on a reported basis and 2.7% on an organic basis year over year. Revenues beat the Zacks Consensus Estimate of $9,826 million. The increase in organic revenues was backed by favorable pricing, led by international combustibles. This growth was partly offset by an unfavorable volume/mix, reflecting lower international combustibles and U.S. volumes, despite higher international smoke-free volumes.
PM’s Quarterly Performance: Key Metrics and Insights
Total shipment volumes decreased 1.9% to 184.3 billion units in the first quarter.
Adjusted gross profit increased 10.1% (up 3.8% on an organic basis) to $6,911 million, while operating income rose 9.8% (up 0.9% on an organic basis) to $3,893 million.
Decoding PM’s Segment Performance
Net revenues in the International Smoke-Free segment grew 24.7% (up 15.8% on an organic basis) to $3,836 million, driven by favorable volume/mix from higher HTU and e-vapor volumes, along with higher HTU pricing. Adjusted gross profit rose 28.6% (up 19.4% organically). Shipment volume grew 11.9% to 44.1 billion units, led by Italy, Global Travel Retail, Taiwan and Russia.
In the International Combustibles segment, net revenues increased 6.8% (up 1% organically) to $5,688 million, as favorable pricing and distribution-related impacts more than offset an unfavorable volume/mix. Adjusted gross profit increased 9.8% (up 3.9% organically). Shipment volume declined 5.1% to 137.3 billion units, with notable decreases in Indonesia, Russia, Germany and Mexico.
Revenues in the U.S. segment fell 30.8% (down 31.6% on an organic basis) to $622 million, reflecting lower ZYN volumes due to distributor and trade inventory movements, as well as an unfavorable pricing comparison from lower prior-year promotional activity. Adjusted gross profit decreased 44.1% organically. Shipment volume declined 21.2% to 2.8 billion units.
Philip Morris: Other Updates
The company ended the quarter with cash and cash equivalents of $5,450 million, long-term debt of $43,808 million and a total shareholder deficit of $7,300 million.
Sneak Peek Into PM’s Outlook
Adjusted EPS for 2026 is envisioned in the $8.36-$8.51 range, indicating 10.9-12.9% growth. Adjusted EPS, excluding currency, is likely to be in the $8.11-$8.26 band, indicating a year-over-year increase of 7.5-9.5%. For 2026, Philip Morris expects reported EPS in the band of $7.56-$7.71 compared with $7.26 in 2025.
The total international industry volume for cigarettes and HTUs (excluding China and the United States) is likely to decline nearly 2% in 2026. Total cigarette and SFP shipment volumes were broadly stable, supported by high-single-digit growth in SFP shipments, partly offset by an approximate 3% decline in cigarette shipments.
For 2026, PM expects net revenues to increase 5-7% on an organic basis. The operating income on an organic basis is likely to rise 7-9%.
Management expects an operating cash flow of around $13.5 billion in 2026. Capital expenditures are likely to be in the band of $1.4 billion to $1.6 billion, primarily implying investments to support the smoke-free business.
For the second quarter of 2026, adjusted EPS is projected in the range of $2.02 to $2.07.
Shares of this Zacks Rank #3 (Hold) company have fallen 9.9% in the past three months compared with the industry’s decline of 9%.
Image Source: Zacks Investment Research
Stocks to Consider
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 29.8% and 66.7%, respectively, from the year-ago figures. Mama's Creations delivered a trailing four-quarter earnings surprise of 125%, on average.
US Foods Holding Corp. (USFD - Free Report) engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2. US Foods Holding delivered a trailing four-quarter earnings surprise of 2.2%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.4% and 20.9%, respectively, from the year-ago figures.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company worldwide. It currently has a Zacks Rank #2. Tyson Foods delivered a trailing four-quarter earnings surprise of 16.5%, on average.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales indicates growth of 4.4%, from the prior-year reported levels.