(Reuters) – Philip Morris International (PMI) said on Thursday it forecast lower-than-expected full-year shipment volumes of its heated tobacco products, overshadowing a rise in its annual profit forecast and lower results. higher than expected in the third quarter.

On Wall Street, Philip Morris shares fell 1.51% to 91.80 at 1:52 p.m. GMT.

Traditional cigarettes still represent the majority of sales for the world’s largest tobacco company, which is however seeking to counter stricter regulations and falling demand in certain markets by turning to alternatives to smoking.

PMI’s market-leading IQOS heated tobacco device has long been at the heart of that plan, and has consumed most of the more than $10 billion PMI says it has invested in its transition away from cigarettes since 2008.

Heated tobacco shipment volumes will be lower than forecast for the full year, PMI said, citing a delay in market launch in Taiwan, limited growth in Russia and Ukraine and “related uncertainty at stock levels” in Europe, taking into account the new regulations on heated tobacco flavors.

That contrasts with the upbeat comment about heated tobacco the company made at an investor day in September, and took the focus away from the profit advance, said Gaurav Jain, director of equity research. at Barclays.

Philip Morris reported third-quarter adjusted earnings of $1.67 per share. Analysts on average expected earnings of $1.61 per share, according to LSEG data.

The group also raised its annual profit forecasts with third-quarter results above expectations, driven by rising cigarette prices, demand for heated tobacco products and the rapid growth of its Zyn nicotine sachets.

(Reporting Juveria Tabassum and Emma Rumney; Gaëlle Sheehan, editing by Kate Entringer)

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