Tobacco company Philip Morris International (NYSE: PM) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 9.4% year on year to $10.85 billion. Its GAAP profit of $2.23 per share was 12.5% above analysts’ consensus estimates.
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Philip Morris (PM) Q3 CY2025 Highlights:
- Revenue: $10.85 billion vs analyst estimates of $10.64 billion (9.4% year-on-year growth, 2% beat)
- EPS (GAAP): $2.23 vs analyst estimates of $1.98 (12.5% beat)
- Operating Margin: 39.3%, up from 36.9% in the same quarter last year
- Market Capitalization: $246 billion
Company Overview
Founded in 1847, Philip Morris International (NYSE: PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $39.99 billion in revenue over the past 12 months, Philip Morris is one of the most widely recognized consumer staples companies. Its influence over consumers gives it negotiating leverage with distributors, enabling it to pick and choose where it sells its products (a luxury many don’t have).
As you can see below, Philip Morris’s sales grew at a decent 8.3% compounded annual growth rate over the last three years as consumers bought more of its products.
This quarter, Philip Morris reported year-on-year revenue growth of 9.4%, and its $10.85 billion of revenue exceeded Wall Street’s estimates by 2%.
Looking ahead, sell-side analysts expect revenue to grow 8.1% over the next 12 months, similar to its three-year rate. This projection is particularly healthy for a company of its scale and indicates the market is forecasting success for its products.
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Cash Is King
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Philip Morris has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition. The company’s free cash flow margin was among the best in the consumer staples sector, averaging 24.2% over the last two years.
Key Takeaways from Philip Morris’s Q3 Results
It was encouraging to see Philip Morris beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 3.7% to $163.96 immediately following the results.
Indeed, Philip Morris had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
