According to a report by French media outlet Boursorama on October 20th, Philip Morris International (PMI) has projected that the shipment volume of its heated tobacco products will be lower than expected this year, thus dampening the company's upward profit forecast and disappointing third-quarter performance.
PMI, despite still playing a significant role in the global tobacco industry, is in search of tobacco alternatives as it battles increasingly strict tobacco regulations and a decline in certain market demands. PMI's heated tobacco product IQOS has long been the centerpiece of the company's transition towards tobacco alternatives as the market leader. Since 2008, PMI has announced an investment of over $10 billion in heated tobacco products.
According to PMI, the delay in the launch of the Chinese Taiwan market, as well as limited growth in the Russian and Ukrainian markets, and the uncertainty surrounding the new regulations on heated tobacco products in Europe, will result in lower than expected shipments of these products for the entire year. This is in stark contrast to the company's optimistic outlook on heated tobacco products during an investor day in September, and has shifted attention away from profit growth.
PMI has announced that adjusted earnings per share for the third quarter were $1.67. Data provided by LSEG shows that analysts had an average forecast of earnings per share of $1.61. However, due to increases in cigarette prices, demand for heated tobacco products, and rapid growth of their nicotine pouch brand Zyn, the company has raised its full-year profit forecast and exceeded expectations in the third quarter.
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