Philip Morris International Surpasses Market Expectations for Q1

PMI’s heated tobacco product helped drive profit and is expected to launch in the U.S. in Q2.

April 25, 2024

Philip Morris International (PMI) on Tuesday surpassed market expectations for first-quarter profit and revenue, helped by robust demand for its heated tobacco product and Zyn nicotine pouches, Reuters reported.

The cigarette maker's flagship heated tobacco device IQOS, expected to launch in the United States in the second quarter, has been a driving force behind its effort to make more money from alternatives to traditional cigarettes.

According to the release, shipments of PMI's IQOS units grew by 20.9% to 33.1 billion in the first quarter, compared with a 6.1% rise in the preceding quarter. PMI had forecast first-quarter shipments of between 31 billion and 32 billion sticks.

Demand for the IQOS device and associated tobacco sticks in major markets like Japan helped the company offset the impact of a ban on flavored heated tobacco products in the European Union.

Philip Morris said the heat-not-burn category surpassed combustible cigarettes in Tokyo in the quarter. PMI has also enjoyed fast-growing U.S. sales of its ZYN nicotine pouches. Shipments of ZYN grew 79.7% from the same period last year, Reuters reported.

It also raised its expectations for nicotine-pouch shipment volumes in the United States to about 560 million cans, which was previously expected to be about 520 million cans.

In March, Philip Morris International announced it was preparing to launch its flagship heated tobacco device IQOS in Austin, Texas.

In 2023, smoke-free products were nearly 40% of 2023 total revenue for Philip Morris, NACS Daily reported. Zyn shipment volume in the United States grew 62% year over year in 2023.