Key Takeaways
- PMI reported Q1 2026 net revenues of $10.146 billion, up 9.1% year on year, or 2.7% organically.
- Adjusted diluted EPS rose 16.0% to $1.96; excluding currency, it was $1.78, up 5.3%.
- Smoke-free products accounted for 43% of total net revenues, and PMI smoke-free products are now available in 108 markets.
- IQOS surpassed Marlboro to become the No. 1 nicotine “brand” in markets where present, reaching 10.9% share of combined cigarette and HTU industry volumes.
- PMI raised its 2026 full-year adjusted diluted EPS forecast to $8.36 to $8.51.
2Firsts, April 22, 2026
Philip Morris International released its first-quarter 2026 earnings report, showing net revenues of $10.146 billion, up 9.1% year on year; adjusted diluted EPS of $1.96, up 16.0%; smoke-free products accounting for 43% of total net revenues; and an increased full-year adjusted diluted EPS forecast of $8.36 to $8.51.
Net revenues rose 9.1% to $10.146 billion
PMI said first-quarter 2026 net revenues were $10.146 billion, compared with $9.301 billion a year earlier, representing reported growth of 9.1% and organic growth of 2.7%. Within that total, international smoke-free net revenues increased 24.7% to $3.836 billion, international combustibles net revenues increased 6.8% to $5.688 billion, and U.S. net revenues declined 30.8% to $622 million.
Adjusted EPS increased 16.0% to $1.96
The company reported diluted EPS of $1.56, down 9.3% from $1.72 in the prior year, mainly due to a non-cash fair value adjustment related to its minority shareholding in India. Adjusted diluted EPS was $1.96, up from $1.69, representing 16.0% growth. Excluding currency, adjusted diluted EPS was $1.78, up 5.3%.
Operating income rose 9.8%, while adjusted operating margin reached 41.1%
PMI reported operating income of $3.893 billion, up 9.8% year on year. Adjusted operating income was $4.168 billion, compared with $3.790 billion a year earlier, representing growth of 10.0%. Adjusted operating income margin rose from 40.7% to 41.1%.
Smoke-free products contributed 43% of net revenues and remained the growth engine
PMI said smoke-free products accounted for 43% of total net revenues, up 1.3 percentage points from a year earlier. International smoke-free shipment volume grew 11.9%, while net revenues increased 24.7% on a reported basis and 15.8% organically. Gross profit in the segment rose 28.6% on a reported basis and 19.4% organically. PMI said smoke-free products remained the primary growth driver for the group.
IQOS continued to expand and surpassed Marlboro in markets where present
PMI said IQOS continued to lead global heat-not-burn category growth, with PMI holding about 77% volume share in the category. In Q1 2026, IQOS surpassed Marlboro to become the No. 1 nicotine “brand” in markets where present, with share of combined cigarette and HTU industry volumes rising 1.7 percentage points to 10.9%. HTU adjusted in-market sales increased 10.9%, while shipment volume rose 11.3% to 41.3 billion units.
In Japan, PMI said IQOS adjusted in-market sales rose by an estimated 10.4%, with total nicotine share reaching 34.9%. In Europe, IQOS adjusted in-market sales rose by an estimated 5.4%, with market share increasing to 12.6%. Outside Europe and Japan, adjusted in-market sales increased 19.4%.
Oral and e-vapor products continued to expand
PMI said modern oral shipment volume increased to 0.5 billion pouches, although declines in Nordic snus more than offset part of the gain, resulting in a 5.1% decline for total oral smoke-free shipment volume. ZYN is now available in 58 markets. In e-vapor, VEEV quarterly shipments exceeded one billion equivalent units for the first time and now shares the No. 1 position in Europe’s closed-pod category.
Combustibles still contributed, with Marlboro share reaching a record
PMI said international combustible shipment volume declined 5.1%, but net revenues still increased 6.8%, or 1.0% organically, mainly driven by strong pricing of 8.5%. Overall cigarette category share stood at 24.8%, while Marlboro gained 0.4 percentage points to a record first-quarter share of 10.7%.
U.S. business was pressured by ZYN inventory movements
PMI said U.S. ZYN offtake volumes, as estimated by Nielsen, grew 10%, but the overall U.S. business was affected by distributor and trade inventory movements in both the current and prior-year periods, as well as promotional comparisons. Total U.S. smoke-free shipment volume declined 21.2%, including a 23.5% drop in ZYN shipments to 2.3 billion pouches, or 155 million cans.
Full-year adjusted EPS guidance was raised to $8.36 to $8.51
Based on Q1 performance, PMI forecast full-year 2026 reported diluted EPS of $7.56 to $7.71. Excluding total adjustments of $0.80 per share, adjusted diluted EPS is projected at $8.36 to $8.51, up 10.9% to 12.9% from $7.54 in 2025. Excluding a favorable currency impact of $0.25, adjusted diluted EPS is projected at $8.11 to $8.26, representing growth of 7.5% to 9.5%.
The company also expects full-year 2026 organic net revenue growth of 5% to 7%, organic operating income growth of 7% to 9%, and second-quarter adjusted diluted EPS of $2.02 to $2.07.
Image Source: PMI
We welcome news tips, article submissions, interview requests, or comments on this piece.
Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn
Notice
1. This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.
2. The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.
3. This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.
4. Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.
Copyright
This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.
For copyright-related inquiries, please contact: info@2firsts.com
AI Assistance Disclaimer
This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.
We welcome any corrections or feedback. Please contact us at: info@2firsts.com
