Philip Morris International Inc. (NYSE:PM) stock fell 0.17% (As on April 21, 11:26:03 AM UTC-4, Source: Google Finance) after the company posted mixed result for the first quarter of FY 23. The Q1 organic net revenues saw robust growth of plus 3.2% against a very strong prior year quarter with organic growth of plus 9%. This reflects the continued strength of IQOS and a step-up in pricing, but was partially offset by expected HTU inventory movements. Cigarette and Heated Tobacco unit shipment volume in Q1 fell by 1.1% Y/Y, reflecting a 3.1% decline in cigarette shipments. Marlboro cigarette shipment volume decreased by 2.4%. Revenue from smoke-free products accounted for 34.9% of total net revenues. Adjusted operating margin for the quarter compressed from 43.6% to 37.3%, with $3 billion in adjusted operating income. The increasing mix of HTUs in the business at higher net revenue per unit continues to positively impact the performance, lower shipments in Europe this quarter due to wholesaler and distributor inventory movements limited the benefit. This was also the main driver for the difference between the smoke-free organic net revenue growth and HTU shipment volume growth. The company expects this positive mix shift to accelerate as both smoke-free organic net revenue growth and HTU shipment growth align more closely with offtake trends for the year as they also did in 2022. The positive mix impact of HTUs, overall volume growth and pricing are powerful drivers of the transformation and growth.

PM in the first quarter of FY 23 has reported the adjusted earnings per share of $1.38, beating the analysts’ estimates for the adjusted earnings per share of $1.34. This reflects a strong underlying delivery from the existing operation, excellent Swedish Match performance and favorable phasing on interest costs. The company had reported the adjusted revenue growth of 3.5 percent to $8.02 billion in the first quarter of FY 23, missing the analysts’ estimates for revenue of $8.11 billion. The company held $2.4 billion in cash and equivalents as of March 31, 2023.

Philip Morris expects FY23 adjusted EPS of $6.10 – $6.22 versus an estimate of $6.34. It sees FY23 organic revenue growth of 7% – 8.5% The company forecasts second quarter HTU shipment volumes of between 30 billion and 32 billion with adjusted diluted EPS in the range of $1.42 to $1.47, including an estimated unfavorable currency impact of $0.13.