Philip Morris (PM) Up 5% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Philip Morris International reported strong second-quarter earnings for 2025, with adjusted earnings per share (EPS) beating estimates, while net sales fell short of expectations. The company raised its full-year EPS guidance, indicating positive growth prospects despite some challenges in revenue generation [2][11]. Financial Performance - Adjusted EPS for Q2 2025 was $1.91, reflecting a year-over-year increase of 20.1%, and beating the Zacks Consensus Estimate of $1.85 [2][3]. - Net revenues reached $10,140 million, a 7.1% increase on a reported basis and 6.8% on an organic basis, although it missed the consensus estimate of $10,255 million [3][4]. - The adjusted operating income rose 16.1% to $4,246 million, driven by improved pricing and volume/mix, despite increased costs in marketing and administration [5]. Segment Performance - Revenues from smoke-free products increased by 15.2%, accounting for 41% of total revenues, with strong performance from IQOS and ZYN products [5][7]. - In the European region, net revenues grew 8.7% to $4,234 million, while the Americas saw a 12.7% increase to $1,272 million, primarily driven by nicotine pouches [7][8]. Future Outlook - For 2025, adjusted EPS is projected to be in the range of $7.43-$7.56, indicating a growth of 13-15% compared to previous estimates [11]. - The company expects net revenues to increase by 6-8% on an organic basis, with operating income anticipated to rise by 11-12.5% [12]. - Philip Morris forecasts a decline of nearly 1% in total international industry volume for cigarettes and heated tobacco units in 2025, with a projected increase in smoke-free product volumes [12]. Cash and Debt Position - The company ended the quarter with cash and cash equivalents of $4,138 million and long-term debt of $42,431 million, alongside a total shareholder deficit of $10,012 million [10].