(Reuters) -Philip Morris International on Thursday raised annual profit forecast, after topping quarterly profit expectations, boosted by higher cigarette prices, demand for its heated tobacco products, and rapid growth of its oral nicotine product ZYN.
The company has benefited from higher pricing of its combustible cigarettes, and demand for its heated tobacco product IQOS and ZYN nicotine pouches which it acquired from oral nicotine company Swedish Match last year.
Costs of tobacco and labor have eased from pandemic-era highs for Philip Morris. The company said in July it expected headwinds from these expenses to ease further in the second half of the year.
It has also sought to counter stricter regulations and falling demand for its traditional products in some markets through a shift into smoking alternatives.
Its market-leading heated tobacco device IQOS has gained traction in countries such as Japan and Italy, while other options like ZYN have also proven popular in the key U.S. market.
In September, the company said it aimed to make more than two-thirds of its net revenues by 2030 from smokeless products such as IQOS heated tobacco sticks.
Shipment volumes for ZYN nicotine pouches, which the Connecticut-based company sells in the U.S., rose 65.7% year-on-year in the third quarter, compared to a 53.1% jump in the previous quarter.
Philip Morris now expects adjusted annual profit of between $6.05 and $6.08 per share, compared to its earlier forecast of $5.96 to $6.05 per share.
It reported third quarter adjusted profit of $1.67 per share. Analysts on average had expected a profit of $1.61 per share, according to LSEG data.
(Reporting by Juveria Tabassum and Emma Rumney; editing by Milla Nissi)
