Philip Morris International (PM) · Consumer Brands
Philip Morris International Q2 2026 earnings: summary, key numbers & outlook
Results filed 22 Jul 2026 · Quarter ended 30 Jun 2026
Press release ↗Investor relations ↗
Summaries and transcripts are machine-generated and can contain errors.
In brief
Philip Morris International reported Q2 2026 net revenues up 10.4% (7.6% organically) to $11.2 billion, reported diluted EPS down 7.7% to $1.80, and adjusted diluted EPS up 15.2% to $2.20.
Philip Morris International's net revenues passed $11 billion for the first time, rising 10.4% to $11.2 billion. Growth came from smoke-free products, led by IQOS heated tobacco, and from higher cigarette prices. Operating income rose 22.0% and adjusted diluted EPS rose 15.2% to $2.20. Reported EPS fell 7.7% to $1.80 because of a non-cash $511 million write-down of the Canadian RBH investment. U.S. revenue slipped 0.7%, though it improved from a weak first quarter.
Management raised its cigarette volume outlook and kept organic net revenue growth at 5% to 7%. Adjusted diluted EPS guidance of $8.26 to $8.41 was cut only for currency, and third-quarter EPS is guided to $2.20 to $2.25. The main tension is the U.S. and Japan: management plans to accelerate U.S. spending in the second half behind ZYN and the future IQOS ILUMA launch. Japan faces pantry de-loading after an excise-driven price rise, and the Middle East conflict adds cost risk.
Key numbers
- Net revenues · GAAP
- $11.2 billion
- Net earnings attributable to PMI · GAAP
- $2.8B
- Reported diluted EPS · GAAP
- $1.80
- Adjusted diluted EPS · non-GAAP
- $2.20
- Operating income · GAAP
- $4.5B
- Adjusted gross profit margin · non-GAAP
- 68.5%
- Adjusted operating income margin · non-GAAP
- 42.6%
up 10.4% (7.6% organically) from a year ago
down from $3,039 million a year ago
down 7.7% from $1.95 a year ago
up 15.2% from a year ago, or 13.6% excluding currency
up 22.0% from a year ago
up 0.7pp from a year ago
up 0.7pp from a year ago
| Segment or metric | Value | Change |
|---|---|---|
| International Smoke-Free net revenues | $3.9B | up 14.2% (11.8% organically) |
| International Combustibles net revenues | $6.5B | up 9.8% (6.4% organically) |
| U.S. net revenues | $856.0M | down 0.7% (0.9% organically) |
| IQOS share of cigarette and HTU industry volume | 9.2% | up 0.2pp |
| ZYN U.S. shipments | 2.9 billion pouches | up 1.8% |
| Smoke-free share of net revenues | approximately 42% | up 0.5pp |
Where each number comes from
- Net revenues: “Net revenues increased by 10.4% (7.6% organically) to $11.2 billion, with both the smoke-free (up by 11.7%, 9.7% organically) and combustibles”
- Net earnings attributable to PMI: “$ 2,817 | $ 3,039 | Net Earnings attributable to PMI | $ 5,255 | $ 5,729 7 | 8 | Less: Distributed and undistributed earnings”
- Reported diluted EPS: “Reported diluted EPS of $1.80 was unfavorably impacted by the non-cash impairment of the RBH equity investment.”
- Adjusted diluted EPS: “Adjusted diluted EPS of $2.20 grew by 15.2%, or by 13.6% excluding a 3 cent favorable currency impact, which was above prior expectations primarily due to transactional effects.”
- Operating income: “Operating Income | 4,530 | 3,712 | 22.0% | 818 | 689 | (43) | 98 | (2) | 76”
- Adjusted gross profit margin: “2026 Adj. Gross Profit Margin | 68.5% | 70.1% | 67.9% | 65.4% vs. Q2 2025 | 0.7pp”
- Adjusted operating income margin: “Adj. Operating Income | 4,773 | 4,246 | 12.4% | 527 | 689 | (43) | (193) | (2) | 76 Adj. OI Margin | 42.6% | 41.9% | 0.7pp”
- International Smoke-Free net revenues: “2026 | $11,192 | $3,877 | $6,459 | $856 vs. Q2 2025 | 10.4% | 14.2% | 9.8% | (0.7)%”
- International Combustibles net revenues: “2026 | $11,192 | $3,877 | $6,459 | $856 vs. Q2 2025 | 10.4% | 14.2% | 9.8% | (0.7)%”
- U.S. net revenues: “2026 | $11,192 | $3,877 | $6,459 | $856 vs. Q2 2025 | 10.4% | 14.2% | 9.8% | (0.7)%”
- IQOS share of cigarette and HTU industry volume: “IQOS gained 0.2pp to reach 9.2% of combined cigarette and HTU industry volumes in markets where present, and grew shipment volumes by 7.6%.”
- ZYN U.S. shipments: “ZYN shipments increased by 1.8% to 2.9 billion pouches, despite an inventory tailwind in Q2 2025.”
- Smoke-free share of net revenues: “Our smoke-free business accounted for approximately 42% of total net revenues (up by 0.5pp vs. Q2 last year) with PMI smoke-free products (SFP) now available in 109 markets.”
Copied from the press release ↗ and other documents in the SEC filing ↗. A figure is published only if its sentence is in the filing.
| From the filing | Q2 2026 | vs year ago | vs last quarter |
|---|---|---|---|
| Revenue | $11.2B | +10.4% | +10.3% |
| Operating income | $4.5B | +22.0% | +16.4% |
| Net income | $2.8B | −7.3% | +15.5% |
| Diluted EPS | $1.80 | −7.7% | +15.4% |
| Free cash flow | $5.1B | +67.3% | — |
| Gross margin | 68.4% | +0.7 pts | +0.3 pts |
| Operating margin | 40.5% | +3.9 pts | +2.1 pts |
Calculated by code from XBRL, not by the model.
Outlook
| Metric | Period | Outlook |
|---|---|---|
| Third quarter adjusted diluted EPS | third quarter 2026 | $2.20 to $2.25 |
| Adjusted diluted EPS | full year 2026 | $8.26 - $8.41 |
| Reported diluted EPS | full year 2026 | $7.19 to $7.34 |
| Organic net revenue growth | full year 2026 | 5% to 7% |
| Organic operating income growth | full year 2026 | 7% to 9% |
| Cigarette shipment volume decline | full year 2026 | 2% to 3% |
| Effective tax rate excluding discrete items | full year 2026 | around 21.5% |
| Operating cash flow | full year 2026 | around $13.5 billion |
| Capital expenditures | full year 2026 | $1.4 to $1.6 billion |
Key takeaways
Net revenues topped $11 billion for first time
Net revenues increased by 10.4% (7.6% organically) to $11.2 billion, with smoke-free up by 11.7% and combustibles up by 9.5%.
RBH impairment drove reported EPS lower
Reported diluted EPS fell 7.7% to $1.80 after a $511 million non-cash charge worth 33 cents. Adjusted diluted EPS grew 15.2% to $2.20.
IQOS grew despite Japan and Poland headwinds
HTU adjusted in-market sales grew by 5.1%, and by 10% excluding Japan and Poland. IQOS exited June with a 68% category share in Japan.
U.S. improved sequentially but remains soft
U.S. net revenues declined 0.7% versus a 16.1% decline in the first six months. ZYN shipments rose 1.8% to 2.9 billion pouches, and the FDA granted MRTP authorization to 20 ZYN variants.
Full-year EPS forecast changed only for currency
Adjusted diluted EPS guidance is $8.26 to $8.41, with the currency benefit cut to $0.15 from $0.20. Excluding currency, growth is 7.5% to 9.5%, and the cigarette volume decline outlook improved to 2% to 3%.
Charts
Fourth quarter worked out from the annual figure.
Data
| Q4 2024 | $9.7B * |
| Q1 2025 | $9.3B |
| Q2 2025 | $10.1B |
| Q3 2025 | $10.8B |
| Q4 2025 | $10.4B * |
| Q1 2026 | $10.1B |
| Q2 2026 | $11.2B |
| Q3 2026 | $11.4B |
Data
| Q1 2025 | $1.72 |
| Q2 2025 | $1.95 |
| Q3 2025 | $2.23 |
| Q1 2026 | $1.56 |
| Q2 2026 | $1.80 |
| Q3 2026 | $2.12 |
Fourth-quarter EPS appears once the press release is read; filings report it only for the full year.
Data
| Q4 2024 | 33.6% |
| Q1 2025 | 38.1% |
| Q2 2025 | 36.6% |
| Q3 2025 | 39.3% |
| Q4 2025 | 32.6% |
| Q1 2026 | 38.4% |
| Q2 2026 | 40.5% |
| Q3 2026 | 42.5% |
Data
| Q4 2024 | $3.7B |
| Q1 2025 | -$754.0M |
| Q2 2025 | $3.1B |
| Q3 2025 | $4.1B |
| Q4 2025 | $4.3B |
| Q1 2026 | -$752.0M |
| Q2 2026 | $5.1B |
| Q3 2026 | $5.0B |
Operating cash flow minus capital expenditure, from cash flow statements.
Questions
What were Philip Morris International's Q2 2026 results?
Net revenues rose 10.4% to $11.2 billion, and operating income rose 22.0%. Adjusted diluted EPS grew 15.2% to $2.20, while reported diluted EPS fell 7.7% to $1.80.
Why did reported EPS fall while adjusted EPS rose?
Reported EPS included a non-cash $511 million impairment of the RBH equity investment, worth 33 cents per share. Adjusted EPS excludes that charge and other items.
What is PMI's full-year 2026 outlook?
Adjusted diluted EPS is forecast at $8.26 to $8.41, with organic net revenue growth of 5% to 7% and organic operating income growth of 7% to 9%. The EPS range was updated for currency only.
What is PMI guiding for the third quarter?
Third-quarter adjusted diluted EPS is expected at $2.20 to $2.25, including an estimated unfavorable currency impact of 8 cents at prevailing exchange rates.
How is the U.S. business performing?
U.S. net revenues declined 0.7% in the quarter, an improvement from the first quarter, with broadly stable ZYN revenues. Management plans to accelerate U.S. investment in the second half, including the ZYN lineup and the future IQOS ILUMA launch.
Documents
SEC filing