Key insights
- Philip Morris cut its annual profit forecast due to competition and regulatory hurdles with Zyn nicotine pouches. The FDA's hesitation to approve new versions of Zyn due to potential risks to new users, including children, is a key factor. While Q1 revenue and adjusted profit beat estimates, the lowered full-year guidance signals potential headwinds for the company.
April 22 (Reuters) - Philip Morris International cut its annual profit forecast on Wednesday, highlighting pressure from increased competition in tobacco products and regulatory uncertainty over its Zyn nicotine pouches.
The company, which sells Marlboro outside the U.S., has stepped up investments to diversify beyond cigarettes, but faces intense rivalry from brands such as British American Tobacco's Velo and delays in authorizing new versions of Zyn.
Popular nicotine pouch products have yet to be cleared for sale in the U.S. despite a fast-track Food and Drug Administration scheme, as agency scientists hesitate to authorize them due to potential risks to new users, including children, Reuters reported earlier this month.
Philip Morris expects full-year adjusted earnings per share of $8.36 to $8.51, compared with its previous forecast of $8.38 to $8.53.
The company said it has factored in impacts from the Middle East conflict in its forecast, but that it does not expect a prolonged impact.
For the first quarter, it reported revenue of $10.15 billion, compared with analysts' average expectation of $9.91 billion, according to data compiled by LSEG.
Its quarterly adjusted profit of $1.96 per share also beat the estimate of $1.83 per share.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shilpi Majumdar)