PM · Q2 FY2026
Philip Morris International Inc. Q2 FY2026 earnings analysis
By SageNoodle ResearchNeutral
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $11.19B | $10.14B (yr ago) | Beat |
| EPS | $1.80 reported | $1.95 (yr ago) | Miss |
| Free Cash Flow | $5.11B | $3.06B (yr ago) | Beat |
| Gross Margin | 68.4% | 67.7% (yr ago) | Beat |
| Operating Margin | 40.5% | 36.6% (yr ago) | Beat |
What changed
Revenue increased 10.4% to $11.19 billion, while stronger pricing, smoke-free growth and operating leverage lifted gross and operating margins. Reported EPS fell 7.7% to $1.80 because of a $0.33-per-share non-cash impairment of the RBH investment, but adjusted EPS rose 15.2% to $2.20 and free cash flow increased to $5.11 billion.
Impact on the investment thesis
There is no prior SageNoodle fair value to revise; this update establishes fair value at $175 per share. The quarter improved confidence in the operating outlook, but the full-year forecast changed only for currency and the current price already reflects much of the margin and smoke-free progress.