News

3M Company MMM has reported second-quarter 2024 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. The bottom and top lines (on an adjusted basis) increased on a year-over-year basis.

It is worth noting that in April 2024, the company completed the spin-off of its Healthcare business into a separate public company.

Inside the Headlines

3M delivered adjusted earnings of $1.93 per share, which surpassed the Zacks Consensus Estimate of $1.66. The metric increased from earnings of $1.39 per share reported in the year-ago quarter.

The company’s adjusted net revenues of $6.02 billion outperformed the Zacks Consensus Estimate of $5.89 billion. The metric increased 1.1% year over year, driven by organic sales growth of 1.2%. Foreign currency translation had a negative impact of 1.4% while acquisitions boosted the top line by 1.3%. On a GAAP basis, MMM’s net sales edged down 0.5% year over year to $6.26 billion.

Region-wise, organic sales in the Americas increased 0.7% year over year while Asia Pacific organic sales inched up 0.6%. Organic sales from businesses in Europe, the Middle East and Africa decreased 4.6%.

3M Company Price, Consensus and EPS Surprise

3M Company price-consensus-eps-surprise-chart | 3M Company Quote

Segmental Results

Revenues from Safety and Industrial totaled $2.76 billion, down 0.2% year over year. Organic revenues increased 1.1% and foreign currency translation had a negative impact of 1.3%.

Revenues from Transportation & Electronics totaled $2.14 billion, reflecting a year-over-year decrease of 2.2%. The downside is attributable to a 1.3% decline in organic sales. Acquisitions boosted segmental revenues by 1% while foreign currency translation had a 1.9% negative impact.

Revenues from the Consumer segment fell 2.4% year over year to $1.26 billion. Organic sales decreased 1.4%. Movements in foreign currencies had an adverse impact of 1%.

Margin Profile

3M’s cost of sales decreased 4.2% year over year to $3.6 billion. Selling, general and administrative expenses decreased 90.3% to $1.1 billion. Research, development and related expenses decreased 6% year over year to $280 million.

In the second quarter, 3M reported an operating income of $1.3 billion against an operating loss of $9.4 billion in the year-ago period.

MMM’s adjusted operating income increased 27.6% year over year to $1.3 billion. The adjusted operating margin was 21.6% compared with 17.2% in the year-ago quarter. The adjusted tax rate was 19.1% compared with 19.5% in the year-ago period.

Balance Sheet & Cash Flow

Exiting the second quarter, 3M had cash and cash equivalents of $10.1 billion compared with $5.7 billion at the end of December 2023. Long-term debt was $11.8 billion at the end of the quarter compared with $13.1 billion at the end of December 2023.

3M generated net cash of $1.79 billion from its operating activities, reflecting a decrease of 35.8% from the year-ago quarter. Capital used for purchasing property, plant and equipment decreased 24.4% to $644 million.

Adjusted free cash flow at the end of the quarter was $1.2 billion, down 20.4% year over year. Adjusted free cash flow conversion was 109% at the end of the same period.

In the first six months of 2024, 3M rewarded its shareholders with $1.2 billion in dividend payments.

2024 Guidance

3M has updated the adjusted earnings guidance for 2024. MMM now expects adjusted earnings in the range of $7.00-$7.30 per share. The midpoint of the guided range is $7.15, which reflects a decline from earnings of $9.24 per share reported in 2023.

Adjusted total sales are expected to decline 0.25% to increase 1.75%. This implies adjusted organic sales growth of 0-2%.

Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Carlisle Companies CSL reported second-quarter adjusted earnings of $6.24 per share, which surpassed the Zacks Consensus Estimate of $5.84. The bottom line increased 32.8% year over year.

Carlisle’s total revenues of $1.5 billion beat the consensus estimate of $1.4 billion. Also, the top line increased 11% year over year.

Honeywell International Inc. HON reported second-quarter 2024 adjusted earnings of $2.49 per share, which surpassed the Zacks Consensus Estimate of $2.42. The bottom line inched up 8% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.36 per share, indicating an increase of 6%.

Total revenues of $9.6 billion beat the consensus estimate of $9.4 billion. The top line inched up 5% from the year-ago quarter.

Danaher Corporation’s DHR second-quarter adjusted earnings (excluding 50 cents from non-recurring items) of $1.72 per share surpassed the Zacks Consensus Estimate of $1.57. The bottom line declined 0.6% year over year.

Danaher’s net sales of $5.7 billion outperformed the consensus estimate of $5.6 billion. However, the metric declined 3% year over year.

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