Philip Morris International (PM) Q3 2024 earnings summary

Executive summary

• Delivered record Q3 2024 results with double-digit organic growth in revenue, operating income, and EPS, driven by strong performance across all business segments, especially smoke-free products and ZYN nicotine pouches.

• Raised full-year 2024 guidance for volume, organic sales growth, operating income, and EPS, reflecting broad-based acceleration in IQOS, ZYN, and combustibles.

• Net revenues for the nine months ended September 30, 2024, increased 7.8% to $28.2B, with smoke-free products accounting for 38.2% of net revenues.

• Operating income rose 17.0% to $10.1B, and net earnings attributable to PMI surged 35.9% to $7.6B, with diluted EPS up 35.5% to $4.89.

• Key events included a $198M Vectura impairment, full U.S. IQOS rights acquisition, and ongoing regulatory, litigation, and geopolitical risks.

Financial highlights

• Q3 2024 organic net revenues grew 11.6% year-over-year to $9.9B, with operating income up 13.8% and adjusted diluted EPS up 14.4% to $1.91, or 18% excluding currency.

• Gross profit increased 13.0% overall, with smoke-free gross profit up 20.2% and combustibles up 8.7%.

• Nine-month net revenues up 7.8% to $28.2B; net earnings attributable to PMI up 35.9% to $7.6B.

• Net cash from operating activities reached $8.2B for nine months, up from $5.9B in 2023.

• Dividend increased 3.8% to $1.35 per share quarterly ($5.40 annualized).

Outlook and guidance

• Raised 2024 shipment volume growth outlook to 2–3%, with adjusted IMS HTU volume growth of around 13%.

• Organic net revenue growth forecast increased to around 9.5%, with smoke-free net revenue expected to reach nearly $15B.

• Adjusted organic operating income growth forecast raised to 14–14.5%; adjusted diluted EPS forecast at $6.45–$6.51, including a $0.40 currency headwind.

• Net cash from operating activities for 2024 expected to be approximately $11B; capex of ~$1.4B.

• No share repurchases in 2024; net debt/adjusted EBITDA ratio targeted at ~2x by end of 2026.