PMI Beats Estimates on Robust Smoke-Free Products Demand

Philip Morris International reported net revenues of $8.8 billion in the first quarter of 2024, up 9.7 percent on a reported basis over the comparable 2023 period. Gross profit grew 12.4 percent to $5.6 billion while operating income was $3 billion, reflecting an 11.5 increase over the 2023 quarter.

Growth was driven by strong demand for heated-tobacco products and Zyn nicotine pouches. Shipments of heat-not-burn products jumped 20.9 percent to 33.13 billion units from the comparable 2023 quarter.

Sales of oral smoke-free products increased 35.8 percent to 4.2 billion units. In the United States, shipments of Zyn nicotine pouches jumped nearly 80 percent versus the prior year to reach 131.6 million cans. The company now commands 74 percent of the category in the U.S.

PMI’s combustible cigarette shipments contracted by 0.4 percent from the 2023 quarter to 143.19 billion sticks.

The smoke-free business now accounts for 39 percent of PMI’s net revenues.

“The strength of our first-quarter results with excellent top-line growth and significant margin expansion gives us the confidence to raise our 2024 currency-neutral guidance,” said PMI CEO Jacek Olczak in a statement.

“Strong smoke-free momentum continues with rapid underlying volume progression and accelerating organic net revenue and gross profit growth, fueled by the operating leverage of IQOS and the best-in-class economics of Zyn.

“We are executing efficiently and effectively in a dynamic operating environment of geopolitical and economic tensions that accentuate currency volatility. We are doing our utmost to mitigate these challenges and deliver robust growth and value creation.”