Philip Morris International Inc. (NYSE:PM) stock rose Friday after the company reported fourth-quarter fiscal 2025 results.
The company pointed to strong smoke-free momentum and a record Marlboro share while outlining upbeat earnings and growth targets.
Quarterly Metrics
Philip Morris reported fourth-quarter adjusted earnings per share of $1.70, in line with the Street view. Quarterly sales of $10.362 billion (+6.8% year over year) missed the Street view of $10.440 billion.
“We achieved another remarkable year of results in 2025, with a fifth consecutive year of volume growth, net revenues surpassing $40 billion, including close to $17 billion from our smoke-free business, and very good operating margin expansion,” said Jacek Olczak, Group CEO PMI.
On the earnings call, Olczak said the business is “increasingly smoke-free,” with 27 markets now exceeding the 50% net revenue milestone, including South Korea, Poland, Italy, Romania, and the U.S., which is also one of eight markets above 75%. He added that in the fourth quarter of 2025, Europe surpassed 50% as well, making three of the company’s four regional segments majority smoke-free.
Revenue in Europe gained 11.0% to $4.598 billion, while SSEA, CIS & MEA sales gained 8.4% to $3.109 billion.
Adjusted operating income in the quarter under review was $3.722 billion, up 5.8% year over year. Adjusted operating margin contracted to 35.9% from 36.3% a year ago.
“With excellent results in 2024 and 2025, we have delivered our three-year CAGR targets on operating income and EPS in just two years,” the CEO added.
The company exited the quarter with cash and equivalents worth $4.872 billion.
Smoke-Free Portfolio Growth
In the fourth quarter, Philip Morris delivered 12.0% net revenue growth (8.6% organically), 12.2% gross profit growth (8.3% organically), while achieving a key milestone with over 50% of net revenues generated by the smoke-free business in 3 of 4 regions.
Combustibles
In the fourth quarter, net revenues grew by 3.2% (up 0.3% organically) with gross profit up by 5.5% (2.8% organically) and Marlboro reaching a record high 11.0% category share.
Outlook
Philip Morris forecasts fiscal 2026 GAAP earnings of $7.87 to $8.02 per share, compared with analysts’ estimates of $7.94.
The company expects fiscal 2026 adjusted earnings of $8.38 to $8.53 per share, compared with estimates of $8.33.
Philip Morris projects first-quarter adjusted earnings of $1.80 to $1.85 per share, below analysts’ estimates of $1.89.
For the long term, Philip Morris expects to meet or beat the top end of its 2024-2026 growth targets. For 2026-2028, it targets 6% to 8% organic net revenue growth.
The company forecasts 8% to 10% organic operating income growth.
It also projects 9% to 11% adjusted diluted EPS growth, excluding currency.
PM Price Action: Philip Morris Intl shares were up 1.48% at $184.68 at the time of publication on Friday. The stock is trading near its 52-week high of $186.69, according to Benzinga Pro data.
Photo by ThamKC via Shutterstock
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