Earnings per share of US$1.14 were one cent lower than in the second quarter of 2016 and nine cents below market expectations.
The cigarettes maker said earnings per share would have been 11 cents higher on a constant currency basis.
Net income clocked in at US$1,781mln, down 0.4% from US$1,788mln the year before.
Net revenues of US$19,319mln were up 1.5% from US$19,041mln.
The bulk of those revenues were taken in excise duties, leaving net revenues of US$6.9bn, up 4% on a year earlier.
The volume of cigarettes shipped fell 7.5% from a year earlier to 193.5bn units.
Reflecting currency movements, the company revised its full-year earnings guidance; analysts should now expect earnings per share to fall within a range of US$4.78 to US$4.93, assuming exchange rates stay as they are. Even the bottom of the range would represent an improvement on 2016’s US$4.48.
"Our quarterly results were robust with, as expected, sequential improvement in our volume performance, as well as strong currency-neutral net revenue growth of 7% versus last year," said André Calantzopoulos, chief executive officer of Philip Morris.
"IQOS, our flagship smoke-free alternative, continues to perform exceptionally well, supported by further recent successful market launches, notably in Korea. In the quarter, shipments of Marlboro HeatSticks represented over 40% of our total shipments in Japan, where we recorded a national share of 10%. To date, more than 2.9 million adult consumers have already stopped smoking and switched to IQOS," he added.
Shares in the tobacco products group were down 0.6% at US$120.84 in pre-market trading.