# Philip Morris International (PM) Q2 2026 earnings

Results filed 2026-07-22 for the quarter ended 2026-06-30. Source page: https://earnings.opennash.com/companies/pm/2026-q2/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1413329/000162828026049107/0001628280-26-049107-index.htm
> 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

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Net revenues | $11.2 billion | up 10.4% (7.6% organically) from a year ago | GAAP |
| Net earnings attributable to PMI | $ 2,817 | down from $3,039 million a year ago | GAAP |
| Reported diluted EPS | $1.80 | down 7.7% from $1.95 a year ago | GAAP |
| Adjusted diluted EPS | $2.20 | up 15.2% from a year ago, or 13.6% excluding currency | non-GAAP |
| Operating income | 4,530 | up 22.0% from a year ago | GAAP |
| Adjusted gross profit margin | 68.5% | up 0.7pp from a year ago | non-GAAP |
| Adjusted operating income margin | 42.6% | up 0.7pp from a year ago | non-GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| International Smoke-Free net revenues | $3,877 | up 14.2% (11.8% organically) |
| International Combustibles net revenues | $6,459 | up 9.8% (6.4% organically) |
| U.S. net revenues | $856 | 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 |

## 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

1. **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%.
2. **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.
3. **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.
4. **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.
5. **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%.

## 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.