Third‑Quarter 2026 Financial Highlights

Philip Morris International Inc. (NYSE: PM) announced that third‑quarter 2026 net revenues reached $11.4 billion, a 5.5% increase year‑over‑year and 7.1% on an organic basis. Gross profit rose 6.7% (8.3% organically) to $7.9 billion, and operating income climbed 14.1% (10.5% organically) to $4.9 billion, setting new quarterly records for net revenue, gross profit and operating income. Reported diluted earnings per share fell 4.9% to $2.12, primarily because of a non‑cash fair‑value adjustment for equity‑security investments, while adjusted diluted EPS grew 5.4% to $2.36, or 5.8% when the one‑cent adverse currency impact is excluded, marking an all‑time quarterly high.

Segment Performance

  • International Smoke‑Free: Shipments increased 0.6% overall, driven by a 2.7% rise in smoke‑free product (SFP) volumes. Net revenue grew 4.1% (6.3% organically) to $4.7 billion, and the segment contributed over 40% of total Q3 revenue, rising to about 42% on a year‑to‑date basis. IQOS heat‑not‑burn units reached 41.5 billion, a 1.5% shipment increase, and its market share rose 0.9 percentage points to 11.6% in Europe. Adjusted in‑market sales (IMS) for heat‑not‑burn grew 7.1% globally, with double‑digit growth outside Japan and Poland.
  • International Combustibles: Net revenue grew 6.5% (7.8% organically) to $6.7 billion, supported by an 8.9% pricing uplift. Cigarette volume was broadly flat, with gains in Turkey, Indonesia and Egypt offsetting declines elsewhere. Gross profit rose 8.6% (9.8% organically). Marlboro’s category share increased 0.5 percentage points to a record 11.4%.
  • U.S. Segment: ZYN nicotine‑pouch shipments rose 4.2% to 3.2 billion pouches, aided by new ZYN ULTRA variants and flagship dry‑flavor launches. Net revenue surged 22.7% to $3.9 billion and gross profit increased 24.2% (23.8% organically). Adjusted operating income fell 3.3% due to higher commercial investment, but the company plans further investment in the fourth quarter, including a transition to 20‑pouch cans.
  • Oral SFP: Total oral SFP volumes turned positive, up 0.5% as modern oral growth of 20.6% (0.5 billion pouches) offset a decline in legacy Nordic snus. ZYN is now sold in 62 markets.
  • E‑Vapor SFP: VEEV shipments jumped 61.6% quarter‑over‑quarter, reinforcing leadership in Europe and expanding in Indonesia, Egypt, Malaysia and South Korea.

Dividend

The regular quarterly dividend was increased 8.8% to $1.60 per share, equating to an annualized $6.40 per share.

Full‑Year 2026 Forecast

Adjusted diluted EPS is projected between $8.11 and $8.26 (excluding currency), representing 7.5%‑9.5% growth versus the 2025 adjusted EPS of $7.54. Including a favorable currency effect of $0.18, the range widens to $8.29‑$8.44, a 9.9%‑11.9% increase. Net revenue is expected to grow 5%‑7% organically, with organic operating income growth of 7%‑9%. Capital expenditures are slated at $1.4‑$1.6 billion, primarily for the smoke‑free business, and net debt to adjusted EBITDA is targeted near 2.0× by year‑end. No share repurchases are planned.

Geopolitical and Energy‑Related Impact

PMI noted that the ongoing Middle‑East conflict has raised energy‑related input costs, adding incremental pressure in Q3 and likely affecting Q4 more strongly. Disruptions from the Ukraine situation, including strikes on logistics infrastructure, are expected to impact operating income for the year.

Conference Call

A conference call hosted by Group Chief Financial Officer Massimo Andolina was webcast at 9:00 a.m. Eastern Time on October 21, 2026, with further market data to follow in an appendix.

Corporate Overview

PMI operates in 110 markets, with its smoke‑free portfolio used by over 43 million adult consumers as of December 31, 2025. Since 2008, the company has invested over $16 billion in developing smoke‑free products and has secured multiple FDA authorizations for IQOS, ZYN and Swedish Match snus, including Modified Risk Tobacco Product designations.