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3M Company (MMM - Free Report) reported third-quarter 2024 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. Both the bottom and top lines increased on a year-over-year basis.
It’s 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 $1.98 per share, which surpassed the Zacks Consensus Estimate of $1.93. The metric increased from $1.68 per share reported in the year-ago quarter.
The company’s net revenues of $6.3 billion surpassed the consensus estimate of $6.1 billion. The metric increased 0.4% year over year. Organic sales declined 0.1%. Foreign currency translation had a negative impact of 0.3%, while divestitures boosted the top line by 0.8%.
Region-wise, organic sales in the Americas inched up 0.3% year over year, while Asia Pacific organic sales increased 1.7%. Organic sales from businesses in Europe, the Middle East and Africa decreased 4.2%.
Revenues from Safety and Industrial totaled $2.78 billion, up 0.5% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.79 billion. Organic revenues increased 0.9% and foreign currency translation had a negative impact of 0.4%.
Revenues from Transportation & Electronics totaled $2.14 billion, reflecting a year-over-year decrease of 1.5%. The downside is attributable to a 1.2% decline in organic sales. The consensus estimate for the segment’s revenues was pegged at $1.92 billion. Foreign currency translation had a 0.3% negative impact on revenues.
Revenues from the Consumer segment fell 1.2% year over year to $1.30 billion. The consensus estimate for the segment’s revenues was pegged at $1.31 billion. Organic sales decreased 0.7%. Movements in foreign currencies had an adverse impact of 0.5%.
Margin Profile
3M’s cost of sales decreased 1.9% year over year to $3.6 billion. Selling, general and administrative expenses decreased 80.4% to $1.1 billion. Research, development and related expenses increased 0.8% year over year to $269 million.
In the third quarter, 3M reported an operating income of $1.3 billion against an operating loss of $3.1 billion in the year-ago period.
MMM’s adjusted operating income increased 8.2% year over year to $1.4 billion. The adjusted operating margin was 23% compared with 21.6% in the year-ago quarter. The adjusted tax rate was 20.5% compared with 24.8% in the year-ago period.
Balance Sheet and Cash Flow
Exiting the third quarter, 3M had cash and cash equivalents of $6.1 billion compared with $5.7 billion at the end of December 2023. Long-term debt was $11.3 billion at the end of the quarter compared with $13.1 billion at the end of December 2023.
3M used net cash of $1.8 billion from its operating activities against $1.9 generated in the year-ago quarter. Capital used for purchasing property, plant and equipment decreased 39.3% to $246 million.
Adjusted free cash flow at the end of the quarter was $1.5 billion. Adjusted free cash flow conversion was 141% at the end of the same period.
In the first nine months of 2024, 3M rewarded its shareholders with $1.6 billion in dividend payments.
2024 Guidance
3M has updated the adjusted earnings and revenue guidance for 2024. MMM now expects adjusted earnings to be in the range of $7.20-$7.30 per share. The midpoint of the guided range is $7.25, which reflects a decline from earnings of $9.24 per share reported in 2023.
Adjusted organic revenues are expected to grow approximately 1%.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
In the past 60 days, the Zacks Consensus Estimate for Brady’s fiscal 2025 earnings has increased 4.6%.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 10.3%.
In the past 60 days, the Zacks Consensus Estimate for ALLE’s 2024 earnings has remained steady.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 0.3%.
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MMM's Q3 Earnings & Revenues Surpass Estimates, Increase Y/Y
3M Company (MMM - Free Report) reported third-quarter 2024 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. Both the bottom and top lines increased on a year-over-year basis.
It’s 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 $1.98 per share, which surpassed the Zacks Consensus Estimate of $1.93. The metric increased from $1.68 per share reported in the year-ago quarter.
The company’s net revenues of $6.3 billion surpassed the consensus estimate of $6.1 billion. The metric increased 0.4% year over year. Organic sales declined 0.1%. Foreign currency translation had a negative impact of 0.3%, while divestitures boosted the top line by 0.8%.
Region-wise, organic sales in the Americas inched up 0.3% year over year, while Asia Pacific organic sales increased 1.7%. Organic sales from businesses in Europe, the Middle East and Africa decreased 4.2%.
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 $2.78 billion, up 0.5% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.79 billion. Organic revenues increased 0.9% and foreign currency translation had a negative impact of 0.4%.
Revenues from Transportation & Electronics totaled $2.14 billion, reflecting a year-over-year decrease of 1.5%. The downside is attributable to a 1.2% decline in organic sales. The consensus estimate for the segment’s revenues was pegged at $1.92 billion. Foreign currency translation had a 0.3% negative impact on revenues.
Revenues from the Consumer segment fell 1.2% year over year to $1.30 billion. The consensus estimate for the segment’s revenues was pegged at $1.31 billion. Organic sales decreased 0.7%. Movements in foreign currencies had an adverse impact of 0.5%.
Margin Profile
3M’s cost of sales decreased 1.9% year over year to $3.6 billion. Selling, general and administrative expenses decreased 80.4% to $1.1 billion. Research, development and related expenses increased 0.8% year over year to $269 million.
In the third quarter, 3M reported an operating income of $1.3 billion against an operating loss of $3.1 billion in the year-ago period.
MMM’s adjusted operating income increased 8.2% year over year to $1.4 billion. The adjusted operating margin was 23% compared with 21.6% in the year-ago quarter. The adjusted tax rate was 20.5% compared with 24.8% in the year-ago period.
Balance Sheet and Cash Flow
Exiting the third quarter, 3M had cash and cash equivalents of $6.1 billion compared with $5.7 billion at the end of December 2023. Long-term debt was $11.3 billion at the end of the quarter compared with $13.1 billion at the end of December 2023.
3M used net cash of $1.8 billion from its operating activities against $1.9 generated in the year-ago quarter. Capital used for purchasing property, plant and equipment decreased 39.3% to $246 million.
Adjusted free cash flow at the end of the quarter was $1.5 billion. Adjusted free cash flow conversion was 141% at the end of the same period.
In the first nine months of 2024, 3M rewarded its shareholders with $1.6 billion in dividend payments.
2024 Guidance
3M has updated the adjusted earnings and revenue guidance for 2024. MMM now expects adjusted earnings to be in the range of $7.20-$7.30 per share. The midpoint of the guided range is $7.25, which reflects a decline from earnings of $9.24 per share reported in 2023.
Adjusted organic revenues are expected to grow approximately 1%.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked companies are discussed below.
Brady Corporation (BRC - Free Report) currently sports a Zacks Rank #1 (Strong Buy). BRC delivered a trailing four-quarter average earnings surprise of 4.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Brady’s fiscal 2025 earnings has increased 4.6%.
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 10.3%.
In the past 60 days, the Zacks Consensus Estimate for ALLE’s 2024 earnings has remained steady.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 0.3%.