S&P 500 component Philip Morris International reported better-than-expected first-quarter profit and sales early Wednesday, raising its Q2 outlook as its smoke-free offerings, with the popular Zyn nicotine pouch leading the way, set to boost volumes.
The Stamford, Conn.-based company reported adjusted earnings of $1.69 per share, up almost 13%. Analysts had projected an 8% gain to $1.61. Revenue came in at $9.3 billion, not quite a 6% gain compared to views for $9.1 billion, up 4%.
A statement from Chief Executive Jacek Olczak noted revenue growth of more than 20% and a 33% gain in gross profit for the company's smoke-free business. Management raised its second-quarter per-share earnings outlook to between $1.80 and $1.85, vs. the $1.80 consensus. For the full year, Philip Morris guided to earnings of between $7.01 and $7.14 a share. The current consensus target is $7.24.
The company's industry outlook calls for around a 1% volume decline in tobacco and heated tobacco units, outside of the U.S. and China. A 12% to 14% rise in smoke-free products is expected to prop overall shipment volume growth to a 2% gain for the year.
The company targets net revenue growth of 6% to 8%, and more than $11 billion in operating free cash flow. Capital expenditures were slated to be $1.5 billion, with a particular focus on investment in U.S. ZYN nicotine pouch capacity.
PM shares advanced 2.3% to 167.92 during Wednesday's stock market action. The S&P 500 stock has gained 37% in 2025, placing it third among performers in the index.
Philip Morris And Zyn
On March 3, Bloomberg reported that Philip Morris is weighing the potential sale of its cigar business in the U.S., part of a shift away from traditional tobacco products to focus on its smoke-free line. The cigar business was a unit of Swedish Match AB, which Philip Morris acquired for $16 billion in 2023. That deal also added Zyn nicotine pouches to its portfolio.
In 2024, the S&P 500 component's smoke-free products comprised about 38% of its total sales. Philip Morris has set a target of smoke-free revenue making up about 66% of its total sales by 2030.
Following Q4 earnings on Feb. 6, Morgan Stanley analyst Eric Serotta wrote that the firm expects Philip Morris' smoke-free products to make up 55% to 65% of total sales by 2030 and that this "should drive continued upward re-rating for the stock."
Over the past two years, Zyn quarterly sales growth has averaged about 60%, according to Morgan Stanley analysis. The company's heated tobacco device, IQOS, has also shown solid gains internationally. In the U.S., Philip Morris expects to start sales of IQOS in Austin, Texas, at the end of Q1, with hopes for an FDA authorization in second half of 2025.
Philip Morris Rises On S&P 500
Philip Morris stock has scored two breakouts since October. The stock's early move on Wednesday's steered shares into record highs following a rebound from support at the stock's 50-day moving average.
Meanwhile, the nine stocks in the IBD-tracked Tobacco industry group have collectively gained around 14.5% in 2025. The Tobacco industry group is ranked a lofty third out of the 197 industries tracked by IBD.
Philip Morris stock has a 21-day average true range of 2.91%. The ATR metric is available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3% or below.
The S&P 500 stock ranks third in the Tobacco industry group. Philip Morris has a 93 Composite Rating out of a best-possible 99. Shares also have a 97 Relative Strength Rating and an 82 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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