Philip Morris International Inc (NYSE:PM) reported a mixed third quarter performance for fiscal year 2023 on Thursday. The company's sales rose by 13.8% year over year to $9.14 billion, slightly missing the analyst estimate of $9.17 billion. Despite this, the adjusted earnings per share (EPS) surpassed projections, coming in at $1.67, which was $0.06 higher than anticipated.
The company's smoke-free products, including IQOS and ZYN, played a significant role in the quarter's results. These products experienced a net revenue increase of 35.6% year over year. The number of IQOS users reached 27.4 million, and U.S shipments of ZYN hit 105.4 million cans.
On the other hand, the cigarette and heated tobacco unit (HTU) shipment volume saw a growth of 2.2%. HTUs saw an increase of 18%, while cigarettes experienced a decrease of 0.5%. Particularly, Marlboro cigarette shipments fell by 1.6% due to the market in the Philippines.
Despite steady sales from combustible products, Philip Morris revised its full-year EPS outlook for FY23 to $6.05-$6.08 from a previous assumption of $7.5%-8.5%. This change assumes an approximately 8% net revenue growth.
In addition to revising its EPS outlook, Philip Morris also hiked its regular quarterly dividend by 2.4% to an annualized rate of $5.20 per share.
However, following these announcements, PM shares traded lower by 2.16% to $91.20 on Thursday. Despite this dip, the stock has seen nearly an 8% gain over the past year and maintains a Strong Buy consensus rating with a target price of $109.81, suggesting an approximately 18% potential upside.
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