01—Abstract
Summary
Summary of the 10-Q filed April 24, 2026. Cited figures are marked; the original filing is the authoritative source.
Philip Morris International Inc. (PM) reported a net revenue increase of 9.1% to $10.1 billiona for the first quarter of 2026, compared to the same period in 2025.
This growth was primarily driven by favorable pricing, particularly in International Combustibles, and a 9.1% increase in smoke-free product shipment volumes. However, diluted Earnings Per Share (EPS) decreased by 9.3% to $1.56b, largely due to a significant unfavorable fair value adjustment for equity security investments in India and Sri Lanka, which negatively impacted earnings by $0.22 per share. The company also incurred $24 million in pre-tax restructuring charges related to U.S. operational optimization initiatives.
Despite the EPS decline, the International Smoke-Free segment showed strong performance with a 24.7%c increase in net revenues, driven by higher HTU and e-vapor volumes. The International Combustibles segment also saw revenue growth of 6.8%, supported by pricing.
Conversely, the U.S. segment experienced a significant 30.8%d decline in net revenues, primarily attributed to lower ZYN volumes and a challenging comparison due to prior year promotional activity. PMI reaffirms its full-year 2026 outlook for a broadly stable total shipment volume, with high-single digit SFP shipment volume growth.
02—Key points
Key Highlights
- Net revenues increased by 9.1% to $10.1 billion, driven by favorable pricing and growth in smoke-free products.
- Diluted EPS decreased by 9.3% to $1.56, primarily due to an unfavorable fair value adjustment on equity investments ($0.22 per share impact).
- International Smoke-Free segment revenue grew by 24.7%, led by higher HTU and e-vapor volumes.
- International Combustibles segment revenue increased by 6.8%, supported by pricing.
- U.S. segment revenue declined by 30.8%, impacted by lower ZYN volumes and promotional comparisons.
- Total shipment volume decreased by 1.9%, with a 5.1% decline in cigarette volumes offset by a 9.1% increase in smoke-free product volumes.
- The company incurred $24 million in pre-tax restructuring charges related to U.S. operational optimization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Philip Morris International Inc. kept $0.24.
- Revenue$10.15B100.0%
- Cost of revenue−$3.24B31.9%
- Gross profit$6.91B68.1%
- Operating costs−$3.01B29.7%
- Operating income$3.89B38.4%
- Interest, other & tax−$1.46B14.3%
- Net income$2.44B24.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 24, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $10.15B$9.30B | +9.1% |
| Cost of Revenue | $3.24B$3.03B | +6.9% |
| Gross Profit | $6.91B$6.27B | +10.1% |
| Operating Income | $3.89B$3.54B | +9.8% |
| Net Income | $2.44B$2.69B | −9.4% |
| EPS (Basic) | $1.56$1.72 | −9.3% |
| EPS (Diluted) | $1.56$1.72 | −9.3% |
| Shares Outstanding (Basic) | 1.56B1.56B | +0.1% |
| Shares Outstanding (Diluted) | 1.56B1.56B | +0.1% |
05—Questions
Frequently Asked Questions
What was the primary driver for the decrease in Diluted Earnings Per Share (EPS)?
The primary driver for the decrease in Diluted EPS was an unfavorable fair value adjustment of $338 million on equity security investments in India and Sri Lanka, which negatively impacted EPS by $0.22.
How did the U.S. segment perform in the first quarter of 2026?
The U.S. segment experienced a significant decline in net revenues, down 30.8%, mainly due to lower ZYN volumes (partially attributed to distributor and trade inventory movements) and a challenging year-over-year comparison for promotional activity.
What is the company's outlook for smoke-free product shipment volumes for the full year 2026?
Philip Morris International expects high-single digit growth for smoke-free product shipment volumes in 2026.
What are the key restructuring activities undertaken by the company?
The company recorded $24 million in pre-tax restructuring charges related to footprint optimization initiatives in the U.S., including the closure of the Richmond office and a cigar manufacturing facility in Dothan, Alabama.
06—Continue