Core Viewpoint - Philip Morris International Inc. reported strong fourth-quarter results for fiscal 2025, highlighting significant growth in its smoke-free business and a record market share for Marlboro [1][2]. Quarterly Metrics - Adjusted earnings per share for the fourth quarter were $1.70, aligning with market expectations [2] - Quarterly sales reached $10.362 billion, reflecting a 6.8% year-over-year increase, but fell short of the anticipated $10.440 billion [2] - The company achieved net revenues exceeding $40 billion for the year, with nearly $17 billion from smoke-free products [2][4]. Smoke-Free Portfolio Growth - In the fourth quarter, net revenue from smoke-free products grew by 12.0% (8.6% organically), and gross profit increased by 12.2% (8.3% organically) [5]. - Over 50% of net revenues were generated from smoke-free products in three out of four regions [5]. Combustibles - Net revenues from combustible products grew by 3.2% (0.3% organically), with gross profit rising by 5.5% (2.8% organically) [6]. - Marlboro achieved a record high category share of 11.0% [6]. Outlook - For fiscal 2026, the company forecasts GAAP earnings of $7.87 to $8.02 per share, slightly below analysts' estimates of $7.94 [7]. - Adjusted earnings for fiscal 2026 are projected to be between $8.38 and $8.53 per share, compared to estimates of $8.33 [7]. - The company anticipates organic net revenue growth of 6% to 8% for 2026-2028 and 8% to 10% growth in organic operating income [8]. Stock Performance - Philip Morris shares increased by 1.48% to $184.68, nearing its 52-week high of $186.69 [9].

Core Insights - Altria Group and Philip Morris International both produce and sell Marlboro cigarettes, but they operate in different markets, with Altria focusing on North America and Philip Morris on international markets [1][6][7] Company Performance - Altria's cigarette volumes fell by 10.2% in 2024, continuing a negative trend, while Philip Morris saw a 0.6% increase in cigarette volumes in 2025, indicating a more favorable business performance for Philip Morris [8] - Altria has made several strategic mistakes, including the spin-off of Philip Morris, which is now seen as a loss of its best business segment [9][11] Market Positioning - Tobacco companies are classified as consumer staples, but unlike necessities, tobacco products are based on personal preference, leading to scrutiny over health impacts [3][5] - Philip Morris has successfully shifted nearly 39% of its revenue and almost 40% of its gross profit to smoke-free products, positioning itself better for future growth compared to Altria, which still relies on cigarettes for nearly 90% of its revenue [11][12] Investment Considerations - Altria offers a high dividend yield of 6.9%, appealing to income investors, while Philip Morris has a lower yield of 3.1% but is considered a better long-term investment due to its stronger business performance [10][13][14] - For investors with a long-term perspective, Philip Morris is viewed as the more attractive option due to its better positioning and growth potential [14]