Philip Morris Q4 2025 Results and 2026 Outlook

Philip Morris International reported fourth-quarter 2025 adjusted earnings of $1.70 per share, in line with analyst consensus and up 9.7% versus the prior-year quarter. Reported diluted EPS was $1.37 in Q4, compared with a year-earlier level that the company said more than doubled year on year.

Net revenues for the quarter were about $10.4 billion, up 6.8% from Q4 2024 and broadly in line with expectations of roughly $10.36–$10.39 billion. Operating income reached $3.4 billion, a 3.5% year-on-year increase, while adjusted operating income rose 5.8% on an organic basis.

Several reports noted that, despite the earnings increase, revenue was viewed as softer than some investors had hoped, and Philip Morris shares declined after the release. One account cited a 2.8% drop in the stock, while another pointed to a 1.4% decline immediately following the results.

For full-year 2025, Philip Morris delivered reported diluted EPS of $7.26, up from $4.52 in 2024. Adjusted diluted EPS was $7.54, representing growth of 14.8%, or 14.2% on a currency-neutral basis. A separate data provider also cited EPS of $7.54 versus a consensus of $1.68, reflecting the different basis of comparison used.

Net revenues reached $40.65 billion, growing 7.3% year on year (6.5% organically). Gross profit increased 11.1% to $27.3 billion, and operating income rose 11.1% to $14.9 billion, with adjusted operating income up 10.6% organically. The company highlighted “very good operating margin expansion,” with the adjusted operating income margin rising to 40.4%.

Management said 2025 marked the fifth consecutive year of volume growth for Philip Morris, with total shipment volume of 786.5 billion equivalent units. This included 607.4 billion cigarette units and 179.1 billion heated tobacco units, alongside oral and e-vapor products.

The company’s smoke-free business remained the main growth engine. In full-year 2025, smoke-free shipment volumes rose 12.8%, driving a 15.0% increase in smoke-free net revenues (14.1% organically) and a 20.3% rise in smoke-free gross profit (18.7% organically). Smoke-free products accounted for 41.5% of total net revenues and nearly 43% of total gross profit.

In the fourth quarter, smoke-free product shipment volumes increased 8.5%, while cigarette volumes fell 2.2%. Smoke-free net revenues grew 12.0% (8.6% organically), against 3.2% reported growth for combustibles. Overall Q4 net revenues were $10.4 billion, split between $4.4 billion from smoke-free products and $6.0 billion from combustibles.

IQOS, the company’s heat-not-burn product, continued to strengthen its position as the second-largest nicotine brand in markets where it is present. IQOS held about 76% global volume share in the heat-not-burn category, with a number one volume share position in 13 markets. Its adjusted market share of total nicotine in Japan reached 32.6% in Q4.

Philip Morris’s oral smoke-free portfolio, including ZYN nicotine pouches, also reported strong growth. Full-year oral smoke-free shipment volume rose 18.5% in pouch or pouch equivalents, with nicotine pouches up nearly 37% in the U.S. and over 35% internationally, despite some snus declines in the Nordics.

ZYN is now available in 55 markets. In the U.S., nicotine pouches represented a high single-digit share of total industry nicotine volumes in 2025, and ZYN held around two-thirds value share of the pouch category. Fourth-quarter ZYN shipment volume reached 196 million cans, up more than 19%, while estimated offtake rose 23%.

The e-vapor brand VEEV more than doubled shipment volumes for the year and is now available in 47 markets. Within closed pods, VEEV held the number one volume share position in eight markets, with growth driven by Europe and Indonesia.

The board declared a regular quarterly dividend of $1.47 per share, equivalent to an annualized $5.88. According to one market report, this represented a dividend yield of about 3.2%, with a dividend payout ratio above 100% based on reported earnings.

For 2026, Philip Morris forecast reported diluted EPS of $7.87 to $8.02. Excluding a projected $0.51 per share of adjustments, the company guided to adjusted diluted EPS of $8.38 to $8.53, implying 11.1% to 13.1% growth versus 2025. Excluding currency, the adjusted EPS growth outlook is 7.5% to 9.5%.

The company also introduced 2026–2028 compound annual growth targets of 6%–8% for organic net revenues, 8%–10% for organic operating income, and 9%–11% for adjusted diluted EPS excluding currency. Management said strong performances in 2024 and 2025 put Philip Morris on track to outperform its 2024–2026 growth algorithm.

Philip Morris is restructuring its reporting from four geographic segments to three segments: International Smoke-Free, International Combustibles and U.S., effective January 1, 2026. The company said the new structure is intended to support its transition toward a smoke-free future.

Institutional investors remain a significant presence in the shareholder base. One filing showed Aurdan Capital Management cut its stake by 10.8% in the third quarter to 48,331 shares, while other large asset managers, including Vanguard, State Street and Geode Capital, increased or maintained sizable holdings. Market reports indicated that roughly 78.6% of the stock is held by hedge funds and other institutions.