Philip Morris (PM) Stock Drops as Q3 Guidance Disappoints Despite Record Revenue

TLDR

• PM beat Q2 EPS estimates with $2.20 adjusted EPS vs. $2.03 consensus
• Q2 revenue hit $11.2B, up 10.4% YoY — first time quarterly net revenue topped $11B
• Q3 EPS guidance midpoint of $2.225 missed the $2.43 analyst consensus
• Smoke-free products drove growth, with revenue up 11.7% and shipment volume up 7.5%
• Full-year 2026 adjusted EPS forecast maintained at $8.26–$8.41

Philip Morris International beat Wall Street’s second-quarter earnings and revenue estimates on Wednesday, but the stock fell around 2.4% after its Q3 guidance disappointed investors.

Philip Morris International Inc., PM

Adjusted EPS came in at $2.20, beating the $2.03 consensus by $0.17. Revenue of $11.2 billion topped the $10.6 billion estimate.

Q2 revenue grew 10.4% year-over-year. It marked the first quarter in the company’s history where net revenues exceeded $11 billion.

PHILIP MORRIS $PM Q2’26 EARNINGS HIGHLIGHTS

🔹 Revenue: $11.2B (Est. $10.63B) 🟢; +10.4% YoY
🔹 Adj. EPS: $2.20 (Est. $2.05) 🟢; +15.2% YoY
🔹 Reported EPS: $1.80; -7.7% YoY, impacted by $511M non-cash RBH equity impairment

Q3 Guide:
🔹 Adj. EPS: $2.20-$2.25 (Est. $2.43) 🔴;… pic.twitter.com/8UtUtRrTPm

— Wall St Engine (@wallstengine) July 22, 2026

The smoke-free segment was the main growth engine. Revenue from that unit rose 11.7%, while combustibles revenue was up 9.5%.

Strong demand for Zyn nicotine pouches helped fuel results, following recent U.S. regulatory approval. Total shipment volume grew 2.5%, with smoke-free product shipments rising 7.5%.

The international smoke-free segment posted 14.2% revenue growth, driven by 8% volume growth. IQOS heat-not-burn products continued to lead within that category.

The company did flag some headwinds. Japan and Poland were called out as markets where IQOS faced pressure during the quarter.

Adjusted EPS grew 15.2% from $1.91 in the same quarter last year. Excluding a favorable three-cent currency impact, growth was 13.6%.

Reported diluted EPS came in at $1.80, down 7.7% from a year ago. That decline was driven by a non-cash impairment charge of $511 million tied to the company’s RBH equity investment.

Q3 Guidance Disappoints

For Q3, Philip Morris guided for adjusted EPS of $2.20 to $2.25. The midpoint of $2.225 came in well below the analyst consensus of $2.43.

That gap is what sent the stock lower despite the headline beat. PM was trading down roughly 2.4% in Wednesday morning trade.

Full-Year Outlook Held Steady

Philip Morris kept its full-year 2026 adjusted EPS forecast in place at $8.26 to $8.41. That represents growth of 9.5% to 11.5% versus 2025.

Excluding currency effects, the forecast implies growth of 7.5% to 9.5%. The company trimmed its estimated currency tailwind to $0.15, down from $0.20 previously.

Full-year organic net revenue growth is expected at 5% to 7%. Organic operating income growth is projected at 7% to 9%.

CEO Jacek Olczak said the company “delivered outstanding results in the second quarter, driving net revenues to over $11 billion for the first time with excellent growth across all headline metrics.”

PM was trading at around $187.40 at the time of writing, down from Tuesday’s close of $188.04.

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