Philip Morris International (PMI) revised its fourth-quarter profit estimates and 2024 forecasts downward, citing concerns over slowing sales of its flagship heated tobacco product, IQOS. The company, known for its Marlboro cigarettes, has been leading the tobacco industry’s transition to smoking alternatives, with IQOS being a significant investment focus.
Slowing Sales of IQOS
Shipments of heated tobacco products increased by 6.1% in the fourth quarter, compared to an 18% growth in the third quarter. This slowdown in growth raised concerns among analysts about the future trajectory of PMI’s revenue streams.
Regulatory Challenges in the EU
PMI also noted an expected further reduction in shipments next year due to the ban on flavored heated tobacco in the European Union. Despite these challenges, IQOS has now surpassed Marlboro in net revenue, showcasing its growing importance to PMI’s portfolio.
Optimistic Outlook for 2024
Entering 2024 with optimism, PMI remains committed to the growth of IQOS. The company plans to conduct a trial launch in the United States, the world’s largest market for smoking alternatives, this year, followed by a full-scale rollout.
Q4 Performance and Analyst Expectations
PMI reported adjusted earnings per share of $1.36 for the fourth quarter, falling short of analysts’ expectations. For the full year, the company expects adjusted earnings per share to range from $6.32 to $6.44, lower than analysts’ anticipated $6.60 per share.
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