Philip Morris Stock Tumbles as Sales Miss Estimates

Philip Morris International (PM) shares sank over 7% in Tuesday afternoon trading after the tobacco giant missed quarterly sales estimates as demand for cigarettes continued to decline.

The maker of Marlboro cigarettes and IQOS heated tobacco devices reported second-quarter revenue rose 7.1% year-over-year to $10.14 billion, while analysts surveyed by Visible Alpha were looking for $10.27 billion. Adjusted earnings per share of $1.91 beat forecasts.

Cigarette shipment volume fell 1.5% year-over-year to 155.2 billion, with total combustibles sales up just 2.1% to $6 billion. Meanwhile, smoke-free product volume jumped 11.8% to 44.8 billion, and sales surged 15.2% to $4.2 billion.

CEO Jacek Olczak said the results reflected “excellent momentum in our multicategory smoke-free business.”

The company boosted its outlook for full-year adjusted EPS to $7.43 to $7.56 from the previous $7.36 to $7.49. However, it said it anticipates total cigarette and smoke-free shipment volume to be up approximately 1%, down from its previous guidance of a 2% gain, as cigarette volumes are expected to slide about 2%.

Even with Tuesday’s losses, shares of Philip Morris International have added more than a third of their value year-to-date.

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