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The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised downward by a penny in the past 60 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters while missing in one.
Let’s see how things are shaping up for 3M this earnings season.
3M’s first-quarter performance is likely to have been hurt by moderating demand across industrial end markets. The Zacks Consensus Estimate for first-quarter earnings reflects a 15.4% drop from the year-ago reported number.
MMM’s performance is expected to have been hurt by persistent weakness in the Safety and Industrial segment due to softness in disposable respirator demand. The Zacks Consensus Estimate for Safety and Industrial segment revenues indicates a 4.8% decline from the year-ago reported number.
A decline in consumer electronics demand, particularly for smartphones, tablets and TVs, due to reduced consumer spending as a result of inflationary pressure is likely to have weighed on the Transportation & Electronics unit. The consensus mark for segmental revenues in the first quarter suggests a 5.9% decrease from the year-ago reported number.
The Healthcare and Consumer segments are also likely to reflect the impact of reduced consumer spending. Weakness in the medical solutions business might have also weighed on the Healthcare segment’s performance. The Zacks Consensus Estimate for Consumer segment revenues hints at a 4.5% decline from the year-ago number. The same for the Healthcare segment shows a 4.1% slip from the first quarter 2022 reported figure.
Given 3M’s substantial international exposure, foreign currency headwinds might have impacted its top-line performance. The consensus mark for total revenues indicates a 40% fall from the year-ago reported number.
However, pricing actions and spending discipline are expected to have supported 3M’s margin performance. Improving supply chains and deceleration in cost inflation are likely to have aided the company’s first-quarter performance.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for 3M this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: 3M has an Earnings ESP of -1.07% as the Most Accurate Estimate is pegged at $1.58, lower than the Zacks Consensus Estimate of $1.59. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: 3M currently carries a Zacks Rank #2.
Highlights of Q4 Earnings
3M’s fourth-quarter 2022 adjusted earnings of $2.28 per share missed the Zacks Consensus Estimate of $2.34. The bottom line decreased year over year due to lower demand and coronavirus-induced disruptions in China. Net sales of $8,079 million outperformed the Zacks Consensus Estimate of $8,036.3 million. However, the top line declined 6.2% year over year due to an adverse foreign currency impact of 5% and a 2% negative impact from divestitures.
Stocks to Consider
Here are some companies which, according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
A. O. Smith (AOS - Free Report) has an Earnings ESP of +5.78% and a Zacks Rank #2. The company is scheduled to release first-quarter 2023 results on Apr 27.
The Zacks Consensus Estimate for A. O. Smith’s first-quarter earnings has been revised upward by a penny in the past 60 days. The company pulled off a trailing four-quarter earnings surprise of 3.2%, on average.
Graco Inc. (GGG - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank #3. The company is slated to release first-quarter 2023 results on Apr 26.
The Zacks Consensus Estimate for Graco’s first-quarter earnings has remained steady in the past 60 days. The company delivered a trailing four-quarter earnings surprise of 0.2%, on average.
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Will Low Demand Environment Mar 3M's (MMM) Q1 Earnings?
3M Company (MMM - Free Report) is scheduled to release first-quarter 2023 financial numbers on Apr 25, before market open.
The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised downward by a penny in the past 60 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters while missing in one.
Let’s see how things are shaping up for 3M this earnings season.
3M Company Price and EPS Surprise
3M Company price-eps-surprise | 3M Company Quote
Factors to Note
3M’s first-quarter performance is likely to have been hurt by moderating demand across industrial end markets. The Zacks Consensus Estimate for first-quarter earnings reflects a 15.4% drop from the year-ago reported number.
MMM’s performance is expected to have been hurt by persistent weakness in the Safety and Industrial segment due to softness in disposable respirator demand. The Zacks Consensus Estimate for Safety and Industrial segment revenues indicates a 4.8% decline from the year-ago reported number.
A decline in consumer electronics demand, particularly for smartphones, tablets and TVs, due to reduced consumer spending as a result of inflationary pressure is likely to have weighed on the Transportation & Electronics unit. The consensus mark for segmental revenues in the first quarter suggests a 5.9% decrease from the year-ago reported number.
The Healthcare and Consumer segments are also likely to reflect the impact of reduced consumer spending. Weakness in the medical solutions business might have also weighed on the Healthcare segment’s performance. The Zacks Consensus Estimate for Consumer segment revenues hints at a 4.5% decline from the year-ago number. The same for the Healthcare segment shows a 4.1% slip from the first quarter 2022 reported figure.
Given 3M’s substantial international exposure, foreign currency headwinds might have impacted its top-line performance. The consensus mark for total revenues indicates a 40% fall from the year-ago reported number.
However, pricing actions and spending discipline are expected to have supported 3M’s margin performance. Improving supply chains and deceleration in cost inflation are likely to have aided the company’s first-quarter performance.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for 3M this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: 3M has an Earnings ESP of -1.07% as the Most Accurate Estimate is pegged at $1.58, lower than the Zacks Consensus Estimate of $1.59. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: 3M currently carries a Zacks Rank #2.
Highlights of Q4 Earnings
3M’s fourth-quarter 2022 adjusted earnings of $2.28 per share missed the Zacks Consensus Estimate of $2.34. The bottom line decreased year over year due to lower demand and coronavirus-induced disruptions in China. Net sales of $8,079 million outperformed the Zacks Consensus Estimate of $8,036.3 million. However, the top line declined 6.2% year over year due to an adverse foreign currency impact of 5% and a 2% negative impact from divestitures.
Stocks to Consider
Here are some companies which, according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
A. O. Smith (AOS - Free Report) has an Earnings ESP of +5.78% and a Zacks Rank #2. The company is scheduled to release first-quarter 2023 results on Apr 27.
The Zacks Consensus Estimate for A. O. Smith’s first-quarter earnings has been revised upward by a penny in the past 60 days. The company pulled off a trailing four-quarter earnings surprise of 3.2%, on average.
Graco Inc. (GGG - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank #3. The company is slated to release first-quarter 2023 results on Apr 26.
The Zacks Consensus Estimate for Graco’s first-quarter earnings has remained steady in the past 60 days. The company delivered a trailing four-quarter earnings surprise of 0.2%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.