Philip Morris Tops Q4 Revenue Forecast

Core Insights - Philip Morris International exceeded earnings expectations for Q4 2024, driven by its expanding smoke-free product lineup [2][3] - The company reported adjusted EPS of $1.55, surpassing the estimated$1.50, and revenue of $9.71 billion, exceeding the forecasted$9.44 billion [2][4] Financial Performance - Q4 2024 metrics include: - EPS: $1.55 (14$1.36) [4] - Revenue: $9.71 billion (7.3$9.05 billion) [4] - Adjusted operating income: $3.52 billion (15.3$3.05 billion) [4] - Smoke-free revenue: $3.9 billion (9.2$3.6 billion) [4] - Combustibles revenue: $5.8 billion (6$5.4 billion) [4] Strategic Shift - The company is strategically shifting towards smoke-free products, which now account for 40% of overall revenue and approximately 42% of gross profit [2][3] - The focus on smoke-free growth is highlighted by the investment in Swedish Match, enhancing its portfolio with the ZYN brand [6] Product Segment Growth - Revenue from smoke-free products grew by 40% in Q4 2024, with Heated Tobacco Units (HTUs) shipments increasing by 5.1% and cigarette shipments rising by 1.1% [7] - The company aims to transition consumers from traditional smoking to healthier alternatives [7] Regulatory and Geographic Expansion - Regulatory successes include U.S. FDA authorization of ZYN nicotine pouches and IQOS devices as Modified Risk Tobacco Products, enhancing credibility for smoke-free alternatives [8] - Adjusted International Market Share (IMS) grew significantly in Japan and Europe, with smoke-free products gaining traction in Italy and Spain [9] Challenges and Outlook - The company faces challenges such as ongoing litigation, including a non-cash impairment charge of $2.3 billion related to the Canadian affiliate RBH [10] - Despite challenges, traditional products remain significant, with Marlboro accounting for 39$7.04 and $7.17, indicating a potential increase of up to 9.1% from 2024 [11][12]