Stock Analysis on Net
Stock Analysis on Net

Philip Morris International Inc. (NYSE:PM)

Common-Size Income Statement 

Philip Morris International Inc., common-size consolidated income statement

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12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Net revenues 100.00 100.00 100.00 100.00 100.00
Cost of sales -32.88 -35.19 -36.65 -35.90 -31.94
Gross profit 67.12% 64.81% 63.35% 64.10% 68.06%
Marketing, administration and research costs -30.38 -29.43 -28.60 -25.55 -26.75
Impairment of goodwill -0.10 0.00 -1.89 0.00 0.00
Operating income 36.64% 35.38% 32.85% 38.56% 41.32%
Interest expense -3.90 -4.65 -4.34 -2.42 -2.35
Interest income 1.53 1.64 1.32 0.57 0.35
Interest expense, net -2.38% -3.02% -3.02% -1.85% -2.00%
Pension and other employee benefit costs -0.11 -0.16 -0.13 -0.08 -0.37
Earnings before income taxes 34.15% 32.21% 29.71% 36.63% 38.95%
Provision for income taxes -6.73 -7.97 -6.65 -7.07 -8.51
Impairment related to the RBH equity investment 0.00 -6.11 0.00 0.00 0.00
Equity investments and securities income, net 1.73 1.68 0.45 0.43 0.47
Net earnings 29.15% 19.81% 23.51% 29.99% 30.92%
Net earnings attributable to noncontrolling interests -1.23 -1.18 -1.29 -1.51 -1.91
Net earnings attributable to PMI 27.92% 18.63% 22.21% 28.49% 29.00%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The common-size income statement reveals several noteworthy trends in the company’s financial performance between 2021 and 2025. A fluctuating pattern is observed in profitability, with significant shifts in key expense categories and income sources impacting net earnings.

Revenue and Gross Profit
Net revenues are consistently represented as 100% throughout the period. Cost of sales as a percentage of net revenues increased from -31.94% in 2021 to -36.65% in 2023, before decreasing to -32.88% in 2025. Consequently, gross profit as a percentage of net revenues declined from 68.06% in 2021 to a low of 63.35% in 2023, then recovered to 67.12% in 2025. This suggests potential pressures on input costs initially, followed by improved cost management or pricing strategies.
Operating Expenses
Marketing, administration, and research costs steadily increased as a percentage of net revenues, rising from -26.75% in 2021 to -30.38% in 2025. Impairment of goodwill was not present in 2021 and 2022, then represented -1.89% of net revenues in 2023, and reappeared as -0.10% in 2025. These increases in operating expenses contributed to a decline in operating income from 41.32% in 2021 to 32.85% in 2023, with a partial recovery to 36.64% in 2025.
Interest and Other Income/Expenses
Interest expense as a percentage of net revenues increased from -2.35% in 2021 to -4.65% in 2024, before decreasing to -3.90% in 2025. Interest income increased from 0.35% to 1.64% in 2024, then slightly decreased to 1.53% in 2025. Net interest expense followed a similar pattern, increasing to -3.02% in 2023 and 2024, then decreasing to -2.38% in 2025. Pension and other employee benefit costs remained relatively stable, representing a small percentage of net revenues throughout the period.
Non-Operating Items and Net Earnings
Earnings before income taxes experienced a decline from 38.95% in 2021 to 29.71% in 2023, followed by a recovery to 34.15% in 2025. A significant impairment related to the RBH equity investment impacted earnings in 2024, representing -6.11% of net revenues. Equity investments and securities income, net, increased from 0.47% in 2021 to 1.73% in 2025. Net earnings as a percentage of net revenues decreased substantially from 30.92% in 2021 to 19.81% in 2024, before rebounding to 29.15% in 2025. Net earnings attributable to PMI mirrored this trend, declining to 18.63% in 2024 and recovering to 27.92% in 2025.

Overall, the period demonstrates a challenging environment in 2023 and 2024, with increased costs and impairments impacting profitability. However, the data suggests a positive trend in 2025, with improvements in gross profit, reduced interest expense, and increased income from equity investments contributing to a recovery in net earnings.

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