(Reuters) – Philip Morris International on Tuesday surpassed market expectations for first-quarter profit and revenue, helped by robust demand for its heated tobacco product and Zyn nicotine pouches.
Philip Morris reported first-quarter adjusted profit of $1.50 per share, beating estimates of $1.41.
However, the company’s shares were down marginally in premarket trade after it cut its annual adjusted profit forecast to between $6.19 and $6.31 per share, from $6.32 to $6.44 estimated earlier.
Excluding currency fluctuations, however, the company expects adjusted earnings per share of $6.55 to $6.67, up from its earlier forecast of $6.43 to $6.55 per share.
The Marlboro 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.
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.
The company’s first-quarter revenue of $8.79 billion beat market expectations of $8.47 billion, according to LSEG data.
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.
It also raised its expectations for nicotine-pouch shipment volumes in the to U.S. to about 560 million cans from about 520 million cans expected earlier.
(Reporting by Juveria Tabassum and Emma Rumney; Editing by Devika Syamnath)
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