Philip Morris International Inc.

Q2 adjusted diluted EPS was $2.20, up 15% in dollars and +14% currency-neutral; organic net revenue grew 7.6%; adjusted gross profit grew 8.7% organically; adjusted operating income grew close to 11% organically to $4.8 billion. H1 adjusted diluted EPS reached a record $4.16, up 15.6% in dollars; H1 organic net revenue grew 5.3%; H1 adjusted operating income rose 6.1% organically to $8.9 billion. International smoke-free H1 net revenue grew 13.7% and gross profit 16.9%, with gross margin up 190 basis points to 70%; total H1 international gross margin expanded 160 basis points to 68.6%. For 2026, management still targets organic net revenue growth of 5% to 7%, organic operating income growth of 7% to 9%, and currency-neutral adjusted diluted EPS growth of 7.5% to 9.5%; in dollars, EPS is forecast at $8.26 to $8.41. For Q3, management expects adjusted diluted EPS of $2.20 to $2.25, with an unfavorable currency impact of $0.08, mid-single-digit organic top-line growth, and modest organic margin expansion. Operating cash flow is expected to be around $13.5 billion.

Emmanuel Babeau struck an upbeat tone, calling Q2 “very strong” and crediting the quarter to smoke-free growth plus better-than-expected combustible performance. He emphasized that the business is entering an “exciting moment” in the U.S. with a broader ZYN portfolio, new marketing, and better regulatory clarity, which he said supports a decision to accelerate investment in the second half. He also framed the company’s model as one that can invest for long-term smoke-free growth while still delivering strong cash generation and shareholder returns.

Babeau highlighted several financial beats: Q2 net revenue above $11 billion for the first time, gross profit up 8.7% organically, operating income at $4.8 billion, and EPS at $2.20, including a $0.03 favorable currency benefit. He said H1 gross cost savings were over $300 million and that PMI remains on track for its $2 billion savings target for 2024-2026, with cumulative savings above $1.8 billion to date. He also noted higher SG&A in the second half due to the decision to step up U.S. growth investment, while still expecting full-year organic operating income margin expansion and operating cash flow of about $13.5 billion.

Analysts focused on why full-year guidance was unchanged despite a strong first half, and management said the main reason was the deliberate plan to increase U.S. investment behind ZYN and the broader nicotine portfolio. On ZYN, management said early feedback on ZYN Ultra is encouraging but too early to overstate, and that the strategy is to optimize price positioning to maximize both volume and bottom-line growth without detailing price actions. Questions on Japan centered on the excise-driven price increase and competition; management said the quarter unfolded largely as expected, share held broadly stable, and more volatility is likely in H2 around the October excise step-up.