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Investing.com - Philip Morris has raised its profit forecasts for the current year and said it was on pace to meet its 2024-2026 growth targets, after the group posted record quarterly income at its smoke-free tobacco unit.
Organic net revenues from the segment, which has become increasingly crucial for Philip Morris as more smokers search for alternatives to traditional cigarettes due to health concerns and tighter regulations, rose by 13.9% versus a year ago to $4.4 billion in the fiscal third quarter. This constituted 41% of total top-line returns and 42% of total gross profit, both up from the same timeframe a year earlier.
One brand in the division, the IQOS heated tobacco product, helped drive much of this growth and the larger heat-not-burn category, Philip Morris said in a statement on Tuesday.
Heated tobacco unit shipment volume stood at 40.8 billion, above estimates of 39.41 billion, according to Bloomberg consensus forecasts.
Adjusted diluted per-share income surged by 17.3% year-over-year to $2.24, while net revenues ticked up by 5.9% to $10.8 billion. Both topped expectations as well.
"Our global smoke-free portfolio is outgrowing the industry by a clear margin, driving positive total volumes, strong top-line growth and impressive margin expansion," said CEO Jacek Olczak.
Full-year adjusted diluted earnings per share are now anticipated to be between $7.46 and $7.56, compared to a prior outlook of $7.43 to $7.56.
Shares of Philip Morris jumped by more than 3% in premarket U.S. trading on Tuesday.