What to expect when Philip Morris (PM) reports Q3 2024 earnings results

Shares of Philip Morris International Inc. (NYSE: PM) stayed green on Wednesday. The stock has gained 11% over the past three months. The tobacco giant is scheduled to report its third quarter 2024 earnings results on Tuesday, October 22, before the markets open. Here’s what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $9.69 billion for PMI in Q3 2024, which compares to revenues of $9.14 billion reported in the same period a year ago. In the second quarter of 2024, net revenues increased nearly 6% year-over-year to $9.5 billion.

Earnings

Philip Morris has guided for adjusted EPS of $1.77-1.82 for Q3 2024. The consensus estimate for Q3 EPS is $1.82. This compares to adjusted EPS of $1.67 reported in the prior-year quarter. In Q2 2024, adjusted EPS amounted to $1.59.

Points to note

Philip Morris is expected to benefit from continued strength in its smoke-free business and resilience in combustibles. Last quarter, the smoke-free business accounted for 38% of total revenues with 36.5 million users. The smoke-free business recorded a YoY growth of around 14% in revenues and 16% in gross profit in Q2.

The momentum in smoke-free products continues to be driven by strong performances from IQOS and ZYN nicotine pouches. At the end of Q2, IQOS users stood at an estimated 30.8 million. The product continues to do well in regions like Japan, Europe and Indonesia. ZYN is seeing strong growth in the US, where shipments grew by 50% last quarter. ZYN’s total pouch unit volumes grew by 20% in Q2.

In Q2, PMI’s heated tobacco units (HTU) shipment volume increased 13% YoY to 35.5 billion units. For the third quarter of 2024, the company expects HTU shipments to be 34-35 billion units.

Last quarter, PMI saw revenues in combustibles grow by 1.2%, driven by pricing and resilient industry volumes. In Q2, cigarettes shipment volume inched up by 0.4%.