Philip Morris International Reports 2026 Third-Quarter & First Nine-Months Results
Philip Morris International Inc. (PM) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 PRESS RELEASE Philip Morris International Reports 2026 Third-Quarter & First Nine-Months Results and Updates 2026 Full-Year Adjusted Diluted EPS Forecast for Currency Only; Third-Quarter Reported Diluted EPS declined by 4.9% to $2.12; Adjusted Diluted EPS grew by 5.4
How this was made
The 30-second read
Why it matters
The earnings mix of revenue growth and EPS decline suggests a balanced market reaction, with potential modest downside pressure.
Market read
The results provide fresh guidance for investors, influencing PMI stock and the broader tobacco sector.
What to watch
Strong performance of smoke‑free products and international expansion could sustain longer‑term upside.
Third-quarter reported diluted EPS declined by 4.9% to $2.12; adjusted diluted EPS grew by 5.4% to $2.36; and by 5.8% excluding currency.
Third-quarter net revenues, gross profit and operating income reached record quarterly highs, with 7.1% organic net revenue growth, 10.5% organic operating income growth and adjusted diluted EPS growth of 5.4%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total shipment volumeother | 206.2 billion equivalent units | – | 0.6% |
| Q3 2026 cigarette shipment volumeother | 158.0 billion equivalent units | – | —% |
| Q3 2026 SFP shipment volumeother | 48.2 billion equivalent units | – | 2.7% |
| Q3 2026 HTU shipment volumeother | 41.5 billion units | – | 1.5% |
| Q3 2026 oral SFP shipment volumeother | 5.3 billion equivalent units | – | 1.8% |
| Q3 2026 e-vapor shipment volumeother | 1.4 billion equivalent units | – | 61.6% |
| Q3 2026 net revenuesGAAP | $11.44B | – | 5.5% |
| Q3 2026 net revenues organic growthnon-GAAP | 7.1% | – | 7.1% |
| Q3 2026 gross profitGAAP | $7.85B | – | 6.7% |
| Q3 2026 adjusted gross profitnon-GAAP | $7.86B | – | 6.7% |
| Q3 2026 adjusted gross profit marginnon-GAAP | 68.7% | – | 0.8pp |
| Q3 2026 operating incomeGAAP | $4.87B | – | 14.1% |
| Q3 2026 adjusted operating incomenon-GAAP | $5.12B | – | 9.6% |
| Q3 2026 adjusted operating income marginnon-GAAP | 44.7 % | – | 1.6pp |
| Q3 2026 reported diluted EPSGAAP | $2.12 | – | (4.9)% |
| Q3 2026 adjusted diluted EPSnon-GAAP | $2.36 | – | 5.4% |
| Q3 2026 adjusted diluted EPS, excluding Currencynon-GAAP | $2.37 | – | 5.8% |
| First Nine-Months 2026 total shipment volumeother | 595.6 billion equivalent units | – | 0.5% |
| First Nine-Months 2026 cigarette shipment volumeother | 452.2 billion equivalent units | – | (1.2)% |
| First Nine-Months 2026 SFP shipment volumeother | 143.4 billion equivalent units | – | 6.4% |
| First Nine-Months 2026 HTU shipment volumeother | 124.5 billion equivalent units | – | 6.7% |
| First Nine-Months 2026 oral SFP shipment volumeother | 14.9 billion equivalent units | – | (5.3)% |
| First Nine-Months 2026 e-vapor shipment volumeother | 4.0 billion equivalent units | – | 68.1% |
| First Nine-Months 2026 net revenuesGAAP | $32.78B | – | 8.2% |
| First Nine-Months 2026 net revenues organic growthnon-GAAP | 5.9% | – | 5.9% |
| First Nine-Months 2026 gross profitGAAP | $22.42B | – | 9.4% |
| First Nine-Months 2026 adjusted gross profitnon-GAAP | $22.44B | – | 9.4% |
| First Nine-Months 2026 adjusted gross profit marginnon-GAAP | 68.5% | – | 0.8pp |
| First Nine-Months 2026 operating incomeGAAP | $13.29B | – | 15.4% |
| First Nine-Months 2026 adjusted operating incomenon-GAAP | $14.06B | – | 10.6% |
| First Nine-Months 2026 adjusted operating income marginnon-GAAP | 42.9 % | – | 0.9pp |
| First Nine-Months 2026 reported diluted EPSGAAP | $5.48 | – | (7.0)% |
| First Nine-Months 2026 adjusted diluted EPSnon-GAAP | $6.52 | – | 11.8% |
| First Nine-Months 2026 adjusted diluted EPS, excluding Currencynon-GAAP | $6.32 | – | 8.4% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| International Smoke-Free Segment2.7% shipment volume growth and a favorable volume/mix driven by higher HTU and e-vapor volumes, partly offset by currency and a challenging HTU comparison due to shipment phasing, notably in Japan. | $3.87B | – | 0.7% |
| International Combustibles SegmentAnother quarter of 8.9% pricing, favorable restructuring of distribution terms in certain markets and broadly flat shipment volume, partly offset by unfavorable geographic mix. | $6.72B | – | 6.5% |
| U.S. SegmentGrowing ZYN shipments of 4.2%, favorable price comparisons against prior-year promotions, and growth in the Wellness business and cigars. | $845M | – | 22.7% |
2026 Full-Year Forecast outlook
- RevenueNet revenue growth of 5% to 7% on an organic basis
- Tax rateAn effective tax rate, excluding discrete tax events, of around 21.5%
- NoteReported diluted EPS of $7.11 - $7.26
- NoteAdjusted Diluted EPS of $8.29 - $8.44
- NoteAdjusted Diluted EPS, excluding currency of $8.11 - $8.26
- NoteOrganic operating income growth of 7% to 9%
- NoteGrowing total PMI cigarette and SFP shipment volume, with high single-digit SFP shipment growth
- NoteOperating cash flow around $13.5 billion at prevailing exchange rates, subject to year-end working capital requirements
- NoteCapital expenditures of $1.4 to $1.6 billion
- NoteFurther net debt to adjusted EBITDA ratio improvement as we target a ratio of close to 2.0x by the end of 2026, at prevailing exchange rates
- NoteNo share repurchases
Capital returns
- Increased regular quarterly dividend by 8.8% to $1.60 per share, or an annualized $6.40 per share.
- No share repurchases.
What drove it
- Third-quarter net revenues increased by 7.1% organically, mainly reflecting a favorable pricing variance driven by international combustibles and the U.S. segment.
- Third-quarter organic operating income increased by 10.5%, largely reflecting the same factors as net revenues.
- SFP adjusted in-market sales grew by high single digits, while HTU adjusted IMS grew by 7.1%.
- International combustibles organic revenue growth reflected favorable pricing variance and distribution-term restructuring in certain markets.
- VEEV quarterly shipments increased by 61.6%.
- ZYN ULTRA, new flagship dry flavors, 1.5mg and 8mg flagship variants supported U.S. ZYN shipment growth.
Concerns
- The favorable restructuring of distribution terms in certain markets is not expected to recur at the same level in future quarters.
- Energy-related inflation drove incremental cost pressures in the third quarter, and PMI expects a slightly higher impact in the fourth quarter.
- Ukraine-related strikes disrupted supply chain and logistics infrastructure in certain locations and are expected to affect operating income this year.
- PMI plans to further increase U.S. investments in the fourth quarter to support ZYN, including consumer communications and transitional support programs for the move to 20-pouch cans.
- The first nine months U.S. segment recorded organic net revenue growth of (5.5)%, organic gross profit growth of (14.6)% and adjusted OCI organic growth of (41.1)%.
What to watch
- Fourth-quarter reacceleration in international smoke-free net revenue growth.
- The impact of energy-related input-price increases on fourth-quarter operating income.
- The scale and return profile of increased U.S. commercial investments behind the ZYN portfolio expansion.
- Whether total PMI cigarette and SFP shipment volume grows for the full year.
- Progress toward a net debt to adjusted EBITDA ratio of close to 2.0x by the end of 2026.
Balance sheet and cash flow
- Operating cash flow around $13.5 billion at prevailing exchange rates, subject to year-end working capital requirements.
- Capital expenditures of $1.4 to $1.6 billion, predominantly supporting the smoke-free business.
- Further net debt to adjusted EBITDA ratio improvement as we target a ratio of close to 2.0x by the end of 2026, at prevailing exchange rates.
Analysis
PMI reported a strong third quarter, with net revenues of $11,438 million, up 5.5%, and 7.1% organic growth. Gross profit rose 6.7% to $7,854 million and operating income increased 14.1% to $4,866 million. The quarter set new records for net revenue, gross profit and operating income. Adjusted operating income was $5,117 million, while adjusted operating income margin expanded to 44.7 % from 43.1 %.
Volume performance was positive despite a broadly flat cigarette base. Total shipment volume increased 0.6% to 206.2 billion equivalent units, supported by 2.7% growth in SFP volume. HTU shipment volume grew 1.5% to 41.5 billion units and HTU adjusted IMS rose 7.1%. Oral SFP volume rose 1.8%, while e-vapor volume increased 61.6%. Smoke-free products accounted for more than 40% of third-quarter total net revenues.
International combustibles was the principal earnings contributor, producing 6.5% revenue growth and 8.6% gross-profit growth. The segment benefited from 8.9% pricing and favorable distribution-term restructuring in certain markets, although PMI said that benefit is not expected to recur at the same level in future quarters. International smoke-free revenue growth was more modest at 0.7% reported and 3.4% organic, reflecting shipment phasing in Japan, even as adjusted IMS accelerated to 8.0%. The U.S. business delivered 22.7% revenue growth and 24.2% gross-profit growth, but operating companies income declined 3.3% as PMI increased commercial investments behind ZYN.
Reported diluted EPS declined 4.9% to $2.12 because of, among other items, the non-cash fair value adjustment for equity security investments. Adjusted diluted EPS increased 5.4% to $2.36, and adjusted diluted EPS excluding currency grew 5.8% to $2.37. For the first nine months, net revenues reached $32,776 million, adjusted diluted EPS was $6.52 and adjusted diluted EPS excluding Currency was $6.32.
The full-year adjusted diluted EPS outlook was updated for currency only to $8.29 - $8.44, with adjusted diluted EPS excluding currency of $8.11 - $8.26. PMI forecast 5% to 7% organic revenue growth and 7% to 9% organic operating income growth, while noting greater fourth-quarter energy-related cost pressure, Ukraine-related disruption and increased U.S. growth investment. The company also raised its regular quarterly dividend by 8.8% to $1.60 per share and maintained guidance for no share repurchases.
Management, verbatim
We delivered another excellent quarter, with growing total volumes, double-digit organic operating income growth and robust margin expansion.
Jacek Olczak, Group CEO PMI
With continued strong offtake momentum for our smoke-free brands and the exceptional results of our combustible business, we are in a strong position to continue delivering best-in-class performance, and firmly on track for a sixth consecutive year of volume growth.
Jacek Olczak, Group CEO PMI
Not in the filing
stated, not guessed- Q3 2026 GAAP net income
- First Nine-Months 2026 GAAP net income
- Q3 2026 operating cash flow
- First Nine-Months 2026 operating cash flow
- Q3 2026 free cash flow
- First Nine-Months 2026 free cash flow
- Period-end cash balance
- Period-end debt balance
- Prior-quarter figures for reported financial metrics
- Prior guidance comparison, because a previous outlook section was not provided
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
The filing is a primary 8‑K earnings release for Philip Morris International, the first public disclosure of Q3 2026 results.
Ticker impact
Philip Morris International reported Q3 2026 results, showing a 4.9% decline in reported EPS to $2.12 while net revenue rose 5.5% to $11.4 bn.
likely modest pressure as the EPS decline tempers enthusiasm from revenue growth
The earnings release shows strong top‑line growth but a dip in EPS, which may limit upside and could cause slight downside pressure.
Market effects
Tobacco sector sees continued volume growth and margin expansion, supporting sector peers.
U.S. and European markets may see modest moves in tobacco‑related stocks.
Large‑cap earnings add to overall market volatility but limited global impact.
Counterpoint
Investors may view the EPS decline as a warning sign despite revenue growth.
Key entities
- companyPhilip Morris International
Large‑cap tobacco company reporting Q3 2026 results.
