Philip Morris sinks on signs of cracks in Zyn biz, despite cheery earnings report
Investors are worried Zyn sales may have hit their peak.
Philip Morris International hit the skids on Tuesday after management reported signs of cracks in its Zyn business, despite an otherwise cheery earnings report for its latest quarter.
At first glance, the results didn’t appear to show a decline in the Zyn business that investors have been fearing. But on a call with analysts, Chief Financial Officer Emmanuel Babeau said the company leaned heavily on promotions during the quarter and expects Zyn shipments to slow in the current quarter. In its previous quarterly update, PMI had reported its first sequential decline in nicotine pouch shipments ever.
Philip Morris International shares fell about 7% on Tuesday morning. They’re still up about 20% for the year.
For the quarter, the company reported adjusted earnings per share of $2.24, compared to the $2.09 analysts polled by FactSet were expecting. It also reported revenue of $10.8 billion, higher than the $10.6 billion the Street was penciling in. The company shipped 224.6 million cans of nicotine pouches in its most recent quarter, up 36% from the same period last year.
PMI also boosted the low end of its annual guidance, saying it now expects to report an adjusted annual profit of $7.46 to $7.56 per share, compared with its prior forecast of $7.43 to $7.56.
