(Reuters) - Philip Morris International (NYSE:PM) on Tuesday surpassed market expectations for first-quarter profit and revenue, helped by robust demand for its heated tobacco product and Zyn nicotine pouches.
The Marlboro maker's flagship heated tobacco device IQOS, expected to launch in the United States in the second quarter, has been a driving force behind its effort to make more money from alternatives to traditional cigarettes.
Shipments of PMI's IQOS units grew by 20.9% to 33.1 billion in the first quarter, compared with a 6.1% rise in the preceding quarter. PMI had forecast first-quarter shipments of between 31 billion and 32 billion sticks.
The company's first-quarter revenue of $8.79 billion beat market expectations of $8.47 billion, according to LSEG data.
Demand for the IQOS device and associated tobacco sticks in major markets like Japan helped the company offset the impact of a ban on flavored heated tobacco products in the European Union.
Philip Morris said the heat-not-burn category surpassed combustible cigarettes in Tokyo in the quarter.
PMI has also enjoyed fast-growing U.S. sales of its ZYN nicotine pouches. Shipments of ZYN grew 79.7% from the same period last year.
It also raised its expectations for nicotine-pouch shipment volumes in the to U.S. to about 560 million cans from about 520 million cans expected earlier.
Philip Morris reported first-quarter adjusted profit of $1.50 per share, beating estimates of $1.41.
However, the company's shares were down marginally in premarket trade after it cut its annual adjusted profit forecast to between $6.19 and $6.31 per share, from $6.32 to $6.44 estimated earlier.
Excluding currency fluctuations, however, the company expects adjusted earnings per share of $6.55 to $6.67, up from its earlier forecast of $6.43 to $6.55 per share.