How did PM's Q4 earnings surprise investors?

Philip Morris International's (PM) Q4 earnings report revealed a company that slightly missed estimates on EPS but surpassed expectations on revenue, leading to mixed reactions from investors. Here's a detailed analysis:

1. **Estimate vs. Actual EPS**: PM's estimated EPS for Q4 2024 was $1.5, which was slightly below the actual EPS of $1.49. This discrepancy of $0.01 might not have been significant enough to surprise investors, as the estimate was nearly met.
PM Actual EPS, Revenue in Fiscal 2024Q4
|code|stock code|stock name|Last Price|Last Change|Actual EPS[20241231]|Actual Revenue[20241231]|market_code|
|---|---|---|---|---|---|---|---|
|PM|PM.N|Philip Morris|156.17|-1.2144979999999999|1.49|9.71E9|169|

2. **Estimate vs. Actual Revenue**: The estimated revenue for the quarter was $9.5 billion, while the actual revenue was $9.71 billion. This $0.21 billion difference, or approximately 2.2%, was substantial enough to potentially surprise investors, especially given the consistency of the company's performance.
3. **Market Reaction**: Despite the slight miss on EPS, the company's revenue beat and other positive factors, such as a 9.8% organic net revenue growth for the year and a 14.9% increase in adjusted operating income, likely contributed to a positive market sentiment. The company's record operating cash flow of $12.2 billion and strong performance in its smoke-free products segment also supported investor confidence.
4. **Investor Sentiment**: The mixed results led to a nuanced investor response. While some investors might have been disappointed by the slight EPS miss, others were likely encouraged by the revenue beat and the overall growth in key performance indicators. The company's optimistic outlook and strategic initiatives in its smoke-free product segment, such as the success of IQOS and ZYN, likely reinforced investor confidence.

In conclusion, while Philip Morris International's Q4 earnings report contained some minor deviations from estimates, the company's strong revenue performance and overall growth trajectory likely balanced out the slight EPS miss, resulting in a mixed but ultimately positive response from investors.