(Reuters) - Philip Morris International (NYSE:PM) raised its annual profit forecast after beating third-quarter estimates on Tuesday, betting on higher prices and resilient demand for its heated tobacco products and ZYN nicotine pouches.
Growing consumer preference for smokeless alternatives to traditional combustible cigarettes and chewing tobacco products in the United States have supported demand for ZYN, which, according to the company, does not contain tobacco.
The Marlboro maker has been investing to expand production capacity for ZYN, in an effort to meet its strong demand.
U.S. ZYN shipments in the quarter grew 41.4% over the prior-year period, as supply-chain constraints started to ease.
The company's flagship heated tobacco device, IQOS, also saw strong growth in regions such as Japan, Europe and Indonesia.
Its consolidated shipment volumes for cigarettes rose 1.3% in the quarter, compared with a 0.4% rise in the preceding three months.
Shares of the company were up nearly 3% in premarket trading.
Philip Morris expects its 2024 adjusted earnings per share, excluding currency, to be between $6.85 and $6.91, compared with its prior range of $6.67 to $6.79.
It reported revenue of $9.91 billion for the third quarter, versus analysts' estimate of $9.69 billion, according to data compiled by LSEG.
Its quarterly adjusted profit of $1.91 per share also beat estimates of $1.82 per share.
Last week, Philip Morris said it, along with peers British American Tobacco (NYSE:BTI) and Japan Tobacco (OTC:JAPAF), would pay C$32.5 billion ($23.6 billion) to settle a long-running lawsuit in Canada.
A Quebec court awarded damages to about 100,000 smokers and ex-smokers who claimed these companies failed to adequately warn consumers about cancer risks.