NEW YORK, July 22, 2026, 09:05 (EDT) — U.S. premarket trade
- Shares were seen around $184.74, roughly 1.8% lower than Tuesday’s closing price of $188.04.
- Adjusted earnings per share for Q2 reached $2.20, surpassing the LSEG forecast of $2.05 by 7.3%.
- The midpoint of Q3 guidance is roughly 8.1% under the Wall Street estimate of $2.42.
Philip Morris International Inc. NYSE:PM reported quarterly revenue and profit that exceeded expectations. Despite this, shares declined. Investors shifted attention to developments expected later in the year.
The main driver of the beat was quality. Currency accounted for roughly a third of the EPS outperformance versus management’s previous expectations. The remaining gains came from spending timing and cigarette volumes.
Certain commercial expenses scheduled for Q2 will now move to Q3. Zyn spending on marketing, distribution and retail locations is also set to increase.
| Measure | Actual or new range | Comparison | Difference |
|---|---|---|---|
| Q2 net revenue | $11.19 billion | $10.63 billion LSEG | +5.3% |
| Q2 adjusted EPS | $2.20 | $2.05 LSEG | +7.3% |
| Q3 adjusted EPS | $2.20-$2.25 | $2.42 Wall Street | Midpoint -8.1% |
| 2026 adjusted EPS | $8.26-$8.41 | Prior $8.31-$8.46 | Midpoint -0.6% |
The table is based on company data and LSEG or Barron’s forecasts. Percentage differences are derived from these figures.
Smoke-free offerings accounted for approximately 42% of total group revenue, marking an increase of 0.5 percentage point compared to the previous year. International revenue from smoke-free products grew by 14.2%.
IQOS continued to drive growth, with shipments increasing by 7.6%. PMI said it accounted for about three-quarters of the world’s heat-not-burn market.
Chief Financial Officer Emmanuel Babeau stated the cigarette performance was not anticipated “to be repeated to the same magnitude for the full year.”
The U.S. business showed mixed performance. Revenue declined by 0.7%, but Zyn shipments increased by 1.8% to reach 2.9 billion pouches. Offtake remained steady or edged up slightly.
Zyn continued to account for nearly 57% of U.S. pouch retail value. Management pointed to shortcomings in stronger and more moist offerings, as well as a higher price premium.
British American Tobacco p.l.c. (LON:BATS) offers the competing Velo product. In June, Philip Morris introduced new moist Zyn Ultra versions, priced per pouch below the main Zyn brand.
The 1.5 mg and 8 mg dry formulations are expected this quarter. Colorado manufacturing achieved commercial-scale output in July. Preparation for IQOS Iluma advances, pending FDA decision.
The full-year adjusted EPS is now projected between $8.26 and $8.41, compared to the earlier range of $8.31 to $8.46. Guidance on a currency-neutral basis remains unchanged at $8.11 to $8.26.
This marked the third announced reduction this year. PMI stated the adjustment was solely due to currency. The anticipated benefit from currency dropped to 15 cents, down from 20 cents.
PM finished Tuesday at $188.04, a decline of 2.43%. The stock reached its 52-week peak of $194.90 the previous day. Despite this pullback, shares remained up roughly 17% for the year as trading began Wednesday.
Risks: Margins could come under pressure due to a firmer dollar, increased Zyn price rivalry, higher costs for launching in the U.S., and regulatory challenges. More rapid IQOS expansion or greater demand for Zyn may help offset these pressures.
Premarket trading indicates that investors believe the Q2 outperformance may have been offset by anticipated results from Q3. The market’s response at the start of regular trading will provide further insight.
