Revenue
Earnings
The consensus estimate for EPS in Q1 2023 is $1.35, which compares to pro forma adjusted EPS of $1.46 reported in the year-ago quarter. Adjusted EPS was $1.56 in Q1 2022. In Q4 2022, adjusted EPS was $1.39 and adjusted EPS, excluding currency, was $1.58.
Points to note
Philip Morris’ goal is to become majority smoke-free by 2025 and the company has been making efforts to expand its smoke-free products portfolio. These efforts have been paying off and they are likely to have benefited the company’s performance in the first quarter.
The acquisition of Swedish Match and full control over IQOS are two factors that have the potential to drive significant growth for the company. The addition of the ZYN nicotine pouch brand provides compelling growth prospects in the US for PMI. In the fourth quarter, ZYN saw shipment volumes grow by 35% and it enjoys a strong position in the market.
The momentum of IQOS continues with around 24.9 million users at the end of the fourth quarter. IQOS is seeing gains across the EU, Japan and emerging markets. The IQOS ILUMA is seeing strong growth in its launch markets with upgrades from existing users and the acquisition of new users surpassing expectations.
Philip Morris’ top line performance in the fourth quarter of 2022 benefited from robust combustible pricing and strength in IQOS. This momentum is likely to have continued into the first quarter as well. However, its margins might continue to be impacted by inflationary pressures.