What to look for when Philip Morris (PM) reports Q2 2024 financial results

Philip Morris International Inc. (NYSE: PM) shares remained in the red on Monday. The stock has gained more than 12% since the beginning of the year. The tobacco company is scheduled to report second-quarter 2024 results on Tuesday, July 23, before the market open. Here’s what to expect from the earnings report:

Income

Analysts are forecasting revenue of $9.17 billion for PMI in the second quarter of 2024. That compares with revenue of $8.96 billion reported during the same period a year earlier. In the first quarter of 2024, revenue rose nearly 10% to $8.8 billion.

Profits

Philip Morris is forecasting adjusted earnings per share of $1.50-$1.55 for Q2 2024. The consensus estimate for Q2 earnings per share is $1.57. This compares to adjusted earnings per share of $1.60 for Q2 2023 and $1.50 for Q1 2024.

Points to note

Philip Morris is seeing strong momentum in its smoke-free business, which accounted for 39% of its total revenue in Q1 2024. The smoke-free business grew its revenue by 21% and gross profit by 32% in the latest quarter. This strength is likely to continue into Q2.

Strong performances IQOS AND ZYN continue to drive PMI growth. IQOS deliveries increased by 21% in the last quarter, largely due to IQOS ILUMAwhich is currently available in 64 markets. IQOS is seeing strong growth in regions such as Japan and Europe, as well as growing participation in new markets such as Indonesia. ZYN Nicotine pouch sales in the U.S. jumped 80% in the last quarter.

In the first quarter, adjusted market sales (IMS) of heated tobacco units (HTU) increased by 12.5%. Philip Morris expects adjusted market sales (IMS) to increase by about 10% in the second quarter of 2024. The company estimates HTU shipments to be between 34 billion and 35 billion in the second quarter.

Philip Morris reported a 3.5% increase in fuel revenue in the latest quarter, helped by strong pricing in markets. Cigarette shipments saw a small year-over-year decline. The decline in cigarette shipments remains a concern.