Philip Morris International Inc. (PMI) reported first‑quarter 2026 results that surpassed analyst expectations, with net revenue of $10.1 billion, a 9.1 % year‑over‑year increase, and diluted earnings per share of $1.56. Adjusted diluted EPS rose to $1.96, reflecting the company’s continued shift toward higher‑margin smoke‑free products, which now account for 43 % of total revenue.
The smoke‑free segment grew 12.4 % in revenue, driven by double‑digit volume growth in IQOS and strong performance of ZYN and VEEV, while the combustibles segment grew 6.7 %. The mix shift toward smoke‑free products contributed to the overall revenue growth and helped maintain gross margin expansion.
Diluted EPS fell 9.3 % to $1.56, largely due to a non‑cash fair‑value adjustment on an equity investment in India, but adjusted diluted EPS beat the consensus estimate of $1.82 by $0.14, a 7.7 % beat. The adjusted EPS beat was driven by pricing power, operational leverage, and the favorable mix shift, offsetting the one‑time charge.
Group CEO Jacek Olczak said, “Our strong Q1 results underscore the structural strength of our business model and our strategic focus on smoke‑free products. We are committed to transforming our portfolio and capturing growth opportunities in the smoke‑free category.” CFO Emmanuel Babeau added, “We delivered a strong start to the year with outstanding growth from our international smoke‑free business and very robust pricing driving impressive progress, despite a particularly strong prior‑year comparison for both the U.S. and combustibles. Organic top line and operating income growth exceeded our expectations, driving plus 10% adjusted OI growth and plus 16% adjusted diluted earnings per share growth to reach $1.96.”
PMI reiterated its full‑year 2026 EPS outlook of $8.36–$8.51, unchanged from the prior guidance, signaling confidence in continued growth. Management highlighted competitive headwinds in the U.S. market, including ZYN inventory normalization and broader competitive pressures, but emphasized tailwinds such as pricing power, favorable currency movements, and strong demand for smoke‑free products.
The market reacted positively, with PMI shares rising 1.92 % in pre‑market trading, driven by the earnings beat, robust smoke‑free growth, and the reaffirmed full‑year guidance.
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