Back to top

Analyst Blog

3M Company (MMM - Analyst Report) is scheduled to report first-quarter 2014 results before the opening bell on Apr 24, 2014. In the last-reported quarter, 3M delivered a positive earnings surprise of 2.50%. Let’s see how things are shaping up for this quarter.

Factors to Consider This Quarter

3M, a diversified technology company, has consistently delivered sustainable increases in revenues and earnings in the past few quarters.

3M’s industrial segment, its primary growth driver, is expected to contribute significantly to the top line. Operations in emerging countries, especially China, are witnessing strengthening demand and are likely to drive revenues. However, headwinds such as macroeconomic pressures, adverse currency movements and competitive pricing might weigh on earnings.

3M is in the process of realigning its portfolio by divesting underperforming assets and investing in high-growth industries such as aerospace, energy, and healthcare. The resultant cost reductions and earnings accretion have the potential to boost earnings this quarter. But rising raw material inflation and higher research and development (R&D) expenses might be a drag on the bottom line.

Earnings Whispers?

Our proven model does not conclusively show that 3M is likely to beat earnings this quarter as it does not have the right combination of two key ingredients. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: ESP or Expected Surprise Prediction, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -1.68%. That is because the Most Accurate estimate stands at $1.76 while the Zacks Consensus Estimate is higher at $1.79.

Zacks Rank #3 (Hold): 3M’s Zacks Rank #3 lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are other companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Alaska Air Group, Inc. (ALK - Snapshot Report), with earnings ESP of +7.14% and a Zacks Rank #1 (Strong Buy).

Advanced Energy Industries, Inc. (AEIS - Snapshot Report), with earnings ESP of +10.00% and a Zacks Rank #1.

Convergys Corporation (CVG - Snapshot Report), with earnings ESP of +10.34% and a Zacks Rank #1.

Read the Full Research Report on MMM
Read the Full Research Report on CVG
Read the Full Research Report on AEIS
Read the Full Research Report on ALK


Zacks Investment Research

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%