Philip Morris International Inc
PM · NYSE
Next quarter
Expected to report Feb 5, 2027 — estimated from last year’s reporting date.
Consensus is $1.79 EPS for Dec 2026 across 5 estimates, ranging $1.79 to $1.81.
PM Sep 2026
- 2.61%
- $2.30
- $2.36
- —
- $11.44B
Reported results
- $11.44B
- 68.67%
- $4.87B
- 42.54%
- $3.31B
- $2.12
Highlights
- Adjusted EPS was $2.36, 2.6% above the $2.30 consensus and up 5.4% from $2.24 a year earlier; GAAP diluted EPS was $2.12, down 4.9% year over year.
- Revenue growth was broad on an organic basis: net revenue rose 5.5% to $11.44 billion, or 7.1% excluding currency and acquisitions or divestitures.
- Smoke-free revenue increased 4.1% to $4.63 billion, with U.S. smoke-free revenue up 25.3% to $758 million; International Smoke-Free grew 3.4% excluding currency and acquisitions or divestitures.
- Combustibles remained the larger revenue driver: International Combustibles revenue rose 6.5% to $6.73 billion, or 7.8% excluding currency and acquisitions or divestitures.
- Profitability improved: adjusted operating income was $5.12 billion, up 9.6%, and adjusted operating margin reached 44.7%, 1.6 percentage points higher year over year.
- GAAP earnings diverged from adjusted growth: net earnings attributable to PMI fell 4.7% to $3.31 billion, reflecting higher income taxes and a swing in equity investment results.
- Cash from operations for the first nine months was $10.45 billion versus $7.52 billion a year earlier; the period included $682 million of pension-asset refunds, primarily from German plans.
Analysis
PMI posted a solid operating quarter, with adjusted diluted EPS of $2.36 beating the $2.30 consensus by 2.6% and rising 5.4% from $2.24 a year ago. Revenue was $11.44 billion, up 5.5% year over year and 2.2% from Q2’s $11.19 billion. GAAP diluted EPS was $2.12, below $2.23 a year ago but above Q2’s $1.80; net earnings attributable to PMI were $3.31 billion, down 4.7% year over year and up from $2.82 billion in Q2. The contrast between adjusted and GAAP earnings is important: core operating performance strengthened, while taxes and equity-investment results weighed on the GAAP comparison.
The print was defined by growth across both smoke-free and combustible products, with particularly rapid U.S. smoke-free expansion, and by improving margins. Smoke-free revenue reached $4.63 billion, while International Combustibles contributed $6.73 billion. Adjusted operating income rose 9.6% to $5.12 billion, and adjusted operating margin expanded 1.6 points to 44.7%. For the first nine months, operating cash flow reached $10.45 billion, though pension-asset refunds contributed to the year-to-date cash increase.
EPS and earnings
Adjusted diluted EPS of $2.36 exceeded the $2.30 consensus by 2.6% and increased 5.4% from $2.24 in Q3 2025. GAAP diluted EPS was $2.12, down from $2.23 a year earlier but up from $1.80 in Q2 2026. Net earnings attributable to PMI were $3.31 billion, compared with $3.48 billion a year ago and $2.82 billion in the prior quarter. The adjusted and GAAP measures tell different stories: adjusted EPS excluding currency was $2.37, up 5.8% year over year, while GAAP earnings were pressured by tax and investment items.
Revenue mix
- Total revenue: Net revenue increased 5.5% to $11.44 billion; excluding currency and acquisitions or divestitures, growth was 7.1%.
- International Smoke-Free: Revenue was $3.87 billion, up 0.7% reported and 3.4% excluding currency and acquisitions or divestitures.
- U.S. smoke-free: Revenue rose 25.3% to $758 million. U.S. segment revenue, including combustibles and wellness, increased 22.7% to $846 million.
- International Combustibles: Revenue reached $6.73 billion, up 6.5% reported and 7.8% excluding currency and acquisitions or divestitures.
Margins and pricing
Adjusted operating income increased 9.6% to $5.12 billion, or 10.5% excluding currency and acquisitions or divestitures. Adjusted operating margin rose to 44.7% from 43.1% a year earlier. Adjusted gross profit margin was 68.7%, up 0.8 percentage points. PMI’s operating-income bridge showed $739 million of favorable price contribution, partly offset by $64 million from volume, mix and other and $23 million of higher costs, on a currency-neutral basis. Reported operating income was $4.87 billion, up 14.1% year over year.
GAAP earnings items
The lower year-over-year GAAP earnings comparison reflected factors below operating income. The income tax provision rose to $986 million from $751 million, while equity investments and securities moved to an $86 million loss from $345 million of income in Q3 2025. Separately, the first nine months included a $511 million impairment related to the RBH equity investment; it did not appear as a Q3 charge. For the first nine months, reported diluted EPS was $5.48 versus $5.89 a year earlier, while adjusted diluted EPS was $6.52 versus $5.83.
Cash generation
Operating cash flow for the first nine months of 2026 was $10.45 billion, compared with $7.52 billion in the same period last year. The cash-flow period included $682 million of refunds of surplus pension assets, primarily from German defined-benefit plans, as well as a $933 million cash benefit from lower inventories. PMI paid $6.90 billion in dividends during the nine months, versus $6.33 billion a year earlier.
