Philip Morris International (PM) Q2 2026 earnings summary

Executive summary

• Q2 and H1 2026 delivered strong double-digit growth in net revenues, gross profit, and adjusted diluted EPS, driven by robust international smoke-free product (SFP) and combustible performance, with IQOS and ZYN leading growth and expansion into 109 markets.

• U.S. segment showed sequential improvement in net revenue and gross profit, supported by ZYN portfolio expansion and new product launches, though full H1 U.S. net revenues declined due to inventory movements and higher manufacturing costs.

• Net earnings attributable to shareholders declined 8.3% to $5.3B, and reported diluted EPS fell 8.4% to $3.36, primarily due to a $511M non-cash impairment on the RBH equity investment and higher effective tax rate.

• On track for another year of best-in-class top and bottom-line growth, with continued investment in SFPs and premium brands.

Financial highlights

• Q2 2026 net revenues reached $11.2B (+10.4% YoY), gross profit $7.7B (+11.5%), and adjusted diluted EPS $2.20 (+15.2%), while reported diluted EPS was $1.80 (-7.7%) due to impairment.

• H1 2026 net revenues totaled $21.3B (+9.8%), gross profit $14.6B (+10.9%), operating income $8.4B (+16.1%), and adjusted diluted EPS $4.16 (+15.6%).

• Net cash from operating activities was $5.1B in H1, with full-year projection at ~$13.5B; capital expenditures expected at $1.4–$1.6B, mainly for smoke-free manufacturing.

• International SFP net revenues grew 13.7–19.2% in H1, with shipment volume up 7.5–9.9%; international combustibles net revenues up 3.8–8.4%.

• U.S. ZYN shipment volumes up 1.8–2% in Q2, but U.S. net revenues down 16.1% YoY in H1.

Outlook and guidance

• Full-year 2026 guidance: organic net revenue growth of 5–7%, organic operating income growth of 7–9%, and adjusted diluted EPS of $8.26–$8.41 (+9.5–11.5%), with a $0.15 currency tailwind.

• Shipment volume expected to be stable to slightly positive, with high single-digit SFP growth offsetting a 2–3% decline in cigarette volumes.

• Q3 2026 guidance: mid-single-digit organic top-line growth, modest margin expansion, and adjusted diluted EPS of $2.20–$2.25.

• Operating cash flow projected at ~$13.5B; net debt to adjusted EBITDA targeted near 2.0x by year-end.