Philip Morris International Inc (PM) Q3 2024 Earnings Call Highlights: Strong Growth Amid Challenges

GuruFocus News
4 min read

In This Article:

  • Organic Revenue Growth: +11.6% in Q3.

  • Shipment Volume Growth: +2.9% in Q3.

  • Adjusted Operating Income Growth: +13.8% organically in Q3.

  • Currency-Neutral Adjusted Diluted EPS Growth: +18% in Q3.

  • Adjusted Diluted EPS: $1.91 in Q3, +14.4% growth in dollar terms.

  • Smoke-Free Net Revenue Growth: +16.8% organically in Q3.

  • Smoke-Free Gross Profit Growth: +20.2% organically in Q3.

  • Combustible Net Revenue Growth: +8.6% in Q3.

  • Combustible Gross Profit Growth: +8.7% in Q3.

  • HTU-Adjusted IMS Volume Growth: +14.8% in Q3.

  • ZYN US Volume Growth: +41.4% in Q3.

  • Oral Smoke-Free Business Volume Growth: +22.2% in Q3.

  • Gross Margin Expansion: +200 basis points for smoke-free products in Q3.

  • Operating Income Margin Expansion: +90 basis points organically in Q3.

  • SG&A Margin Expansion: +40 basis points in adjusted dollar terms in Q3.

  • Gross Cost Efficiencies: $180 million in Q3, $490 million year-to-date.

  • Full Year Organic Net Revenue Growth Forecast: +9.5%.

  • Full Year Currency-Neutral Adjusted Diluted EPS Growth Forecast: +14% to +15%.

  • Operating Cash Flow Target: Around $11 billion for the year.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Philip Morris International Inc (NYSE:PM) reported strong double-digit organic top and bottom-line growth in Q3 2024.

  • IQOS and ZYN products showed significant volume growth, with IQOS achieving a 14.8% year-on-year increase in adjusted in-market sales.

  • The company raised its full-year guidance for organic revenue growth to around 9.5%, driven by strong performance across its product categories.

  • Philip Morris International Inc (NYSE:PM) achieved a record adjusted diluted earnings per share of $1.91, reflecting a 14.4% growth in dollar terms.

  • The company continues to expand its smoke-free product offerings, with IQOS now available in 92 markets and plans to reach 100 by 2025.

Negative Points

  • Philip Morris International Inc (NYSE:PM) faced unfavorable currency impacts, notably due to the weakness in the Egyptian pound and Argentine peso.

  • The company is dealing with supply constraints for ZYN in the US, which may not be fully resolved until 2025.

  • There are ongoing challenges with illicit trade and patent infringements in the nicotine pouch market.

  • The combustible business, while showing growth, faces potential regulatory challenges and excise tax hikes in various markets.

  • Philip Morris International Inc (NYSE:PM) is still navigating the long-standing cigarette-related litigation claims in Canada, which could impact financials.

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