Smoke-free products accounted for 39.3% of total net revenues, tobacco company Philip Morris International (PMI) said in reporting its fourth-quarter earnings on Thursday.
Revenue for the quarter jumped by 11% to $9.05 billion while operating income dipped 1.2% to $2.9 billion.
The cigarette maker said its IQOS electronic cigarettes has now exceeded Marlboro in terms of net revenue and IQOS users at the end of the fourth quarter were up by 1.2 million versus September 2023. PMI will have the full rights to commercialize all IQOS products in the United States as of April 30.
"We are pleased that smoke-free products reached nearly 40% of our total net revenues and over 40% of our gross profit in the fourth quarter,” said CEO Jacek Olczak. “This was led by the continued growth of IQOS, which has now surpassed Marlboro in terms of net revenues, confirming its position as the leading premium nicotine brand less than 10 years from launch.”
Modern oral nicotine pouch Zyn reported a 78.2% growth in shipment volume—116.3 million cans versus fourth quarter 2022 Swedish Match shipments of 65.3 million cans. PMI now has an 83% share of Swedish Match, which sells products that includes Zyn.
“The fourth quarter also marked the first anniversary of our combination with Swedish Match, which delivered very strong results in 2023 driven by the stellar U.S. performance of Zyn," Olczak said.
While its smoke-free products’ net revenues were up, total cigarette volume fell 0.5% with Marlboro decreasing by 0.8% to 60.2 billion units for the quarter. Adjusted in-market sales for heated tobacco units (HTU) in the fourth quarter increased 13.9%.
On Feb. 2, PMI announced it had reached a global settlement with British American Tobacco (BAT) that resolves all ongoing patent infringement litigation between the cigarette makers related to their heated tobacco and vapor products.
PMI’s global corporate headquarters are located in Stamford, Connecticut.
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