Philip Morris beats profit, revenue expectations as IQOS strength helps offset cigarette shipment declines

Shares of Philip Morris International Inc. eased 0.2% in premarket trading, even after the cigarette seller reported first-quarter profit and revenue that beat expectations, as growth in heated tobacco units shipments helped offset declines in cigarette shipments. Net income rose to $2.42 billion, or $1.55 a share, from $1.83 billion, or $1.17 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share came to $1.57, above the FactSet consensus of $1.40. Net revenue rose 6.0% to $7.59 billion, beating the FactSet consensus of $7.27 billion. Cigarette shipments fell 7.3% to 145.51 billion units, with Marlboro shipments dropping 9.4% to 53.68 billion units, while heated tobacco unit shipments rose 29.9% to 21.73 billion units. “This performance was driven by the continued strength of IQOS, in particular, reflecting excellent user, volume and market share momentum, as well as further progress with manufacturing and operating cost efficiencies,” said Chief Executive Andre Calantzopoulos. “Our results also benefited from the timing of specific factors, notably associated with shipments in certain markets and the phasing of commercial investments, which are expected to partially reverse in the second quarter.” The company expects 2021 adjusted EPS of $5.95 to $6.05, compared with the FactSet consensus of $5.96. The stock has rallied 10.7% year to date through Monday, while the S&P 500 has gained 10.8%.

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