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Philip Morris beat Q2 estimates, with adjusted EPS up 15.2% and net revenues rising 10.4%.
Organic revenue growth of 7.6% was driven by pricing and strong international smoke-free volumes.
2026 organic sales growth remains forecast at 5-7%, with adjusted EPS seen at $8.26-$8.41.
Philip Morris International Inc. (PM - Free Report) reported second-quarter 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
PM posted quarterly adjusted earnings of $2.20 per share, which increased 15.2% year over year. Excluding currency effects, the adjusted earnings jumped 13.6% year over year. The bottom line beat the Zacks Consensus Estimate of $2.04.
Philip Morris International Inc. Price, Consensus and EPS Surprise
Net revenues of $11,192 million increased 10.4% on a reported basis and 7.6% on an organic basis year over year. Revenues beat the Zacks Consensus Estimate of $10,556 million. The increase in organic revenues was backed by favorable pricing in the international combustibles business, with additional support from favorable volume/mix due to strong international smoke-free volumes, partly offset by an unfavorable international combustibles mix.
PM’s Quarterly Performance: Key Metrics and Insights
Total shipment volumes increased 2.5% to 205.2 billion units in the second quarter.
Adjusted gross profit increased 11.5% (up 8.7% on an organic basis) to $7,665 million, while adjusted operating income rose 12.4% to $4,773 million.
Decoding PM’s Segment Performance
Net revenues in the International Smoke-Free segment grew 14.2% (up 11.8% on an organic basis) to $3,877 million, attributed to a favorable volume/mix from higher HTU and e-vapor volumes, alongside favorable pricing driven by HTUs. Adjusted gross profit rose 17.1% (up 14.6% organically). Shipment volume grew 8% to 44.7 billion units, led by broad-based growth across markets, particularly Taiwan, Romania and Greece.
In the International Combustibles segment, net revenues increased 9.8% (up 6.4% organically) to $6,459 million, driven by favorable pricing, partly offset by an unfavorable geographic mix as growth in developing markets more than offset declines in Europe. Adjusted gross profit increased 11.5% (up 8% organically). Shipment volume increased 1.1% to 156.9 billion units, with growth in Turkey, Indonesia and Egypt.
Revenues in the U.S. segment fell 0.7% (down 0.9% on an organic basis) to $856 million, due to broadly stable ZYN revenues, declines in the cigar business and unfavorable timing effects in the Wellness business. Adjusted gross profit decreased 9% (down 8.9% organically). Shipment volume increased 1.8% to 3.5 billion units.
Philip Morris: Other Updates
The company ended the quarter with cash and cash equivalents of $5,999 million, long-term debt of $42,366 million and a total shareholder deficit of $6,657 million.
Sneak Peek Into PM’s Outlook
Adjusted EPS for 2026 is now envisioned in the $8.26-$8.41 range, indicating 9.5-11.5% growth. Earlier, the metric was expected in the $8.36-$8.51 per share range, implying 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 $7.19-$7.34 compared with $7.26 in 2025. Earlier, the metric was expected in the $7.56-$7.71 per share range.
Overall shipment volumes are expected to remain stable to slightly increase, driven by continued high-single-digit growth in smoke-free products, while cigarette volumes are projected to decline 2-3%, compared with the previous expectation of around 3%.
For 2026, PM still expects net revenues to increase 5-7% on an organic basis. The operating income on an organic basis is likely to rise 7-9%.
This Zacks Rank #4 (Sell) company 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 third quarter of 2026, adjusted EPS is projected in the range of $2.20 to $2.25.
The company’s shares have gained 11.1% in the past three months compared with the industry’s growth of 15.9%.
Image Source: Zacks Investment Research
Stocks to Consider
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year earnings implies growth of 254.9% from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.
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). Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.
Hormel Foods Corporation (HRL - Free Report) develops, processes and distributes various meat, nuts and other food products to foodservice, convenience store and commercial customers in the United States and internationally. It carries a Zacks Rank of 2 at present. HRL delivered a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Hormel Foods’ current fiscal-year sales and earnings indicates growth of 1.4% and 9.5%, respectively, from the prior-year reported levels.
View the Zacks #1 Rank List
Image: Bigstock
Philip Morris Q2 Earnings Beat Estimates, Organic Sales Rise 7.6% Y/Y
Key Takeaways
Philip Morris International Inc. (PM - Free Report) reported second-quarter 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
PM posted quarterly adjusted earnings of $2.20 per share, which increased 15.2% year over year. Excluding currency effects, the adjusted earnings jumped 13.6% year over year. The bottom line beat the Zacks Consensus Estimate of $2.04.
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 $11,192 million increased 10.4% on a reported basis and 7.6% on an organic basis year over year. Revenues beat the Zacks Consensus Estimate of $10,556 million. The increase in organic revenues was backed by favorable pricing in the international combustibles business, with additional support from favorable volume/mix due to strong international smoke-free volumes, partly offset by an unfavorable international combustibles mix.
PM’s Quarterly Performance: Key Metrics and Insights
Total shipment volumes increased 2.5% to 205.2 billion units in the second quarter.
Adjusted gross profit increased 11.5% (up 8.7% on an organic basis) to $7,665 million, while adjusted operating income rose 12.4% to $4,773 million.
Decoding PM’s Segment Performance
Net revenues in the International Smoke-Free segment grew 14.2% (up 11.8% on an organic basis) to $3,877 million, attributed to a favorable volume/mix from higher HTU and e-vapor volumes, alongside favorable pricing driven by HTUs. Adjusted gross profit rose 17.1% (up 14.6% organically). Shipment volume grew 8% to 44.7 billion units, led by broad-based growth across markets, particularly Taiwan, Romania and Greece.
In the International Combustibles segment, net revenues increased 9.8% (up 6.4% organically) to $6,459 million, driven by favorable pricing, partly offset by an unfavorable geographic mix as growth in developing markets more than offset declines in Europe. Adjusted gross profit increased 11.5% (up 8% organically). Shipment volume increased 1.1% to 156.9 billion units, with growth in Turkey, Indonesia and Egypt.
Revenues in the U.S. segment fell 0.7% (down 0.9% on an organic basis) to $856 million, due to broadly stable ZYN revenues, declines in the cigar business and unfavorable timing effects in the Wellness business. Adjusted gross profit decreased 9% (down 8.9% organically). Shipment volume increased 1.8% to 3.5 billion units.
Philip Morris: Other Updates
The company ended the quarter with cash and cash equivalents of $5,999 million, long-term debt of $42,366 million and a total shareholder deficit of $6,657 million.
Sneak Peek Into PM’s Outlook
Adjusted EPS for 2026 is now envisioned in the $8.26-$8.41 range, indicating 9.5-11.5% growth. Earlier, the metric was expected in the $8.36-$8.51 per share range, implying 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 $7.19-$7.34 compared with $7.26 in 2025. Earlier, the metric was expected in the $7.56-$7.71 per share range.
Overall shipment volumes are expected to remain stable to slightly increase, driven by continued high-single-digit growth in smoke-free products, while cigarette volumes are projected to decline 2-3%, compared with the previous expectation of around 3%.
For 2026, PM still expects net revenues to increase 5-7% on an organic basis. The operating income on an organic basis is likely to rise 7-9%.
This Zacks Rank #4 (Sell) company 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 third quarter of 2026, adjusted EPS is projected in the range of $2.20 to $2.25.
The company’s shares have gained 11.1% in the past three months compared with the industry’s growth of 15.9%.
Image Source: Zacks Investment Research
Stocks to Consider
United Natural Foods, Inc. (UNFI - Free Report) distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for United Natural’s current fiscal-year earnings implies growth of 254.9% from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 29.9%, on average.
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). Mama's Creations delivered a trailing four-quarter earnings surprise of 129.2%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30% and 73.3%, respectively, from the year-ago figures.
Hormel Foods Corporation (HRL - Free Report) develops, processes and distributes various meat, nuts and other food products to foodservice, convenience store and commercial customers in the United States and internationally. It carries a Zacks Rank of 2 at present. HRL delivered a trailing four-quarter earnings surprise of 3.2%, on average.
The Zacks Consensus Estimate for Hormel Foods’ current fiscal-year sales and earnings indicates growth of 1.4% and 9.5%, respectively, from the prior-year reported levels.