Oct 21 (Reuters) – Philip Morris International
The Stamford, Connecticut-based company beat Wall Street estimates for third-quarter sales and profits, but said energy-related inflation had an increasing impact on its cost base in the period and this would increase further in the fourth quarter.
“The long-term situation remains unpredictable, and it is difficult to assess the broader implications for consumers or the global cost environment,” it said, adding for now the situation remains manageable.
The war in Ukraine has also caused “certain disruptions” to its operations, including strike-related impacts, the company said. It expects those pressures to continue weighing on operating income this year.
Its third-quarter performance was helped by strong demand for its cigarettes in markets like Turkey and Indonesia, offsetting long-term declines elsewhere, and another hike in tobacco prices, resulting in what Philip Morris said was an “exceptional” quarter for its cigarette business.
The company reported another quarter of growth for its Zyn nicotine pouches in the US, where it is the market leader, at 4.2%. But this is well below rates seen in the past as Zyn faces growing competition from rivals like British American Tobacco’s Velo.
Philip Morris said it would increase investments to support the brand, including increasing the number of pouches per can to 20 from 15 across the majority of the Zyn range.
The company’s shares were down 3% in premarket trade.
The company reported adjusted profit of $2.36 per share for the quarter, compared with analysts’ average estimate of $2.29 per share, according to data compiled by LSEG.
Philip Morris continues to expect full-year adjusted earnings per share of $8.11 to $8.26, excluding currency effects.
(Reporting by Shania S Thomas in Bengaluru and Emma Rumney in London; Editing by Tasim Zahid and Louise Heavens)
