Philip Morris (PM) Passed 40% Smoke-Free Revenue, but Cigarettes Did the Growing

Philip Morris International (NYSE:PM) just reported a record quarter that looks like proof its smoke-free bet is working. Adjusted earnings per share reached $2.36, a quarterly high, and smoke-free products made up more than 40% of net revenue. But cigarettes grew faster, with sales of cigarettes and other combustibles up 6.4%, ahead of the 4.1% gain in smoke-free, and pricing in international cigarettes adding 8.9%. That raises the question for the stock: is its premium price a bet on smoke-free growth that cigarettes are still paying for? Philip Morris sells Marlboro and other cigarettes, mostly outside the U.S., along with IQOS heated-tobacco devices and ZYN nicotine pouches.