(Reuters) – Philip Morris International beat market expectations for first-quarter profit and revenue on Tuesday, helped by strong demand for its heated tobacco products and Zyn nicotine pouches.
The Marlboro maker’s flagship product, IQOS, scheduled to launch in the United States in the second quarter, has been a driving force in its efforts to make more money from alternatives to traditional cigarettes.
PMI’s IQOS unit shipments increased 20.9% to 33.1 billion in the first quarter, compared to a 6.1% increase in the previous quarter. PMI forecast first-quarter shipments of between 31 and 32 billion sticks.
The company’s first-quarter revenue of $8.79 billion exceeded market expectations of $8.47 billion, according to LSEG data.
Demand for the IQOS device and associated tobacco sticks in major markets like Japan has helped the company offset the impact of the ban on flavored heated tobacco products in the European Union.
Philip Morris said the heat-not-burn cigarette category surpassed combustible cigarettes in Tokyo during the quarter.
PMI has also seen rapid growth in U.S. sales of its ZYN nicotine pouches. ZYN shipments increased by 79.7% compared to the same period last year.
It also raised its expectations for nicotine pouch shipping volumes to the United States to around 560 million cans, up from around 520 million cans expected earlier.
Philip Morris reported first-quarter adjusted earnings of $1.50 per share, beating estimates of $1.41.
However, the company’s shares fell slightly in premarket trading after lowering its forecast for adjusted full-year earnings to between $6.19 and $6.31 per share, from the previously estimated $6.32 to $6.44.
However, excluding currency fluctuations, the company expects adjusted earnings per share of between $6.55 and $6.67, up from its prior forecast of $6.43 to $6.55 per share. .
(Reporting by Juveria Tabassum and Emma Rumney; editing by Devika Syamnath)
