We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3M Company (MMM) Earnings, Revenues Miss Estimates in Q3
Read MoreHide Full Article
3M Company (MMM - Free Report) reported disappointing results for third-quarter 2018 with both earnings and revenues missing estimates.
The company’s adjusted earnings in the reported quarter were $2.58 per share, missing the Zacks Consensus Estimate of $2.70. However, earnings recorded an increase of 10.7% from the year-ago tally of $2.33.
In the third quarter, 3M Company’s net sales were $8,152 million, reflecting a decline of 0.2% from the year-ago quarter. The decrease was due to 1.5% negative impact from divestitures and 1.7% negative impact from foreign currency translation. This was partially offset by 1.2% gain from pricing, 1.7% gain from acquired assets and 0.1% favorable impact from volume growth.
Notably, the top line missed the Zacks Consensus Estimate of $8,421 million.
On a geographical basis, sales in the United States increased 1.3% year over year, while that generated in the Asia-Pacific grew 1.6%. Europe, Middle East and Africa’s sales declined 3.9% and that from Latin America/Canada decreased 5.5%.
Segmental Details
The company reports net sales under five segments — Industrial, Safety and Graphics, Health Care, Electronics and Energy, and Consumer. The segmental information is briefly discussed below:
Revenues from the Industrial segment came in at $3,023 million, flat year over year. Results were driven by 2.2% growth in organic sales, offset by 2.1% negative impact from foreign currency translations and 0.1% negative impact from divestitures.
Revenues from the Safety and Graphics segment totaled $1,660 million, increasing 7% year over year. The improvement came on the back of 2.2% gain from organic sales growth as well as 7% gain from acquisitions, net of divestitures. This was partially offset by 2.2% negative impact from foreign currency translations.
Revenues from the Health Care segment were $1,445 million, reflecting a decline of 2.7% year over year. The decline was attributable to 1.1% fall in organic sales and 1.7% negative impact from foreign currency translations.
Revenues from the Electronics and Energy segment totaled $1,443 million, decreasing 4.8% year over year. The decline was due to 6.1% negative impact from divestitures and 1% negative impact from foreign currency translations. This was partially offset by 2.3% gain from organic sales growth.
Revenues from the Consumer segment fell 3.4% year over year to $1,235 million. The decrease was attributable to 2% fall in organic sales and 1.4% negative impact from foreign currency translations.
Margin Profile
In the quarter under review, 3M Company’s cost of sales increased 2.5% year over year to $4,159 million. It represented 51% of net sales compared with 49.7% in the year-ago quarter. Selling, general and administrative expenses decreased 5.5% to $1,547 million. It represented 19% of net sales versus 20% in the year-ago quarter. Research, development and related expenses were $430 million. It represented 5.3% of net sales versus 5.7% in the year-ago quarter.
Operating income in the quarter under review increased 0.4% year over year to $2,016 million. Operating margin grew 10 basis points to 24.7%.
Balance Sheet and Cash Flow
Exiting the third quarter, 3M Company’s cash and cash equivalents were $3,185 million, up 13.7% from $2,801 million at the end of the last-reported quarter. Long-term debt balance increased 19.9% sequentially to $13,539 million.
In the reported quarter, the company generated net cash of $2,139 million, increasing 22.2% from the year-ago tally of $1,750 million. Capital used for purchasing property, plant and equipment increased 16% year over year to $377 million. Free cash flow generated was $1,762 million, increasing 23.6%.
During the third quarter, the company used $794 million for paying dividends to shareholders while repurchased $1.1 billion shares.
Outlook
3M Company has revised down its adjusted earnings guidance for 2018 from $10.20-$10.45 to $9.90-$10.00 per share.
Organic sales growth guidance has been revised to about 3% from 3-4% projected earlier. Free cash flow conversion has been revised to 90-95% from 90-100% projected earlier. Effective tax rate is anticipated to be 20-21%.
Zacks Rank & Stocks to Consider
3M Companycurrently has a Zacks Rank #4 (Sell).
Some better-ranked stocks are Macquarie Infrastructure Co. , Anthem, Inc. and Ameren Corp. (AEE - Free Report) . While Macquarie Infrastructure sports a Zacks Rank #1 (Strong Buy), Anthem and Ameren carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Macquarie Infrastructure surpassed estimates twice in the trailing four quarters with an average beat of 8.05%.
Anthem exceeded estimates in each of the trailing four quarters with an average beat of 6.65%.
Ameren surpassed estimates thrice in the trailing four quarters with an average beat of 9.76%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
3M Company (MMM) Earnings, Revenues Miss Estimates in Q3
3M Company (MMM - Free Report) reported disappointing results for third-quarter 2018 with both earnings and revenues missing estimates.
The company’s adjusted earnings in the reported quarter were $2.58 per share, missing the Zacks Consensus Estimate of $2.70. However, earnings recorded an increase of 10.7% from the year-ago tally of $2.33.
In the third quarter, 3M Company’s net sales were $8,152 million, reflecting a decline of 0.2% from the year-ago quarter. The decrease was due to 1.5% negative impact from divestitures and 1.7% negative impact from foreign currency translation. This was partially offset by 1.2% gain from pricing, 1.7% gain from acquired assets and 0.1% favorable impact from volume growth.
Notably, the top line missed the Zacks Consensus Estimate of $8,421 million.
3M Company Price, Consensus and EPS Surprise
3M Company Price, Consensus and EPS Surprise | 3M Company Quote
On a geographical basis, sales in the United States increased 1.3% year over year, while that generated in the Asia-Pacific grew 1.6%. Europe, Middle East and Africa’s sales declined 3.9% and that from Latin America/Canada decreased 5.5%.
Segmental Details
The company reports net sales under five segments — Industrial, Safety and Graphics, Health Care, Electronics and Energy, and Consumer. The segmental information is briefly discussed below:
Revenues from the Industrial segment came in at $3,023 million, flat year over year. Results were driven by 2.2% growth in organic sales, offset by 2.1% negative impact from foreign currency translations and 0.1% negative impact from divestitures.
Revenues from the Safety and Graphics segment totaled $1,660 million, increasing 7% year over year. The improvement came on the back of 2.2% gain from organic sales growth as well as 7% gain from acquisitions, net of divestitures. This was partially offset by 2.2% negative impact from foreign currency translations.
Revenues from the Health Care segment were $1,445 million, reflecting a decline of 2.7% year over year. The decline was attributable to 1.1% fall in organic sales and 1.7% negative impact from foreign currency translations.
Revenues from the Electronics and Energy segment totaled $1,443 million, decreasing 4.8% year over year. The decline was due to 6.1% negative impact from divestitures and 1% negative impact from foreign currency translations. This was partially offset by 2.3% gain from organic sales growth.
Revenues from the Consumer segment fell 3.4% year over year to $1,235 million. The decrease was attributable to 2% fall in organic sales and 1.4% negative impact from foreign currency translations.
Margin Profile
In the quarter under review, 3M Company’s cost of sales increased 2.5% year over year to $4,159 million. It represented 51% of net sales compared with 49.7% in the year-ago quarter. Selling, general and administrative expenses decreased 5.5% to $1,547 million. It represented 19% of net sales versus 20% in the year-ago quarter. Research, development and related expenses were $430 million. It represented 5.3% of net sales versus 5.7% in the year-ago quarter.
Operating income in the quarter under review increased 0.4% year over year to $2,016 million. Operating margin grew 10 basis points to 24.7%.
Balance Sheet and Cash Flow
Exiting the third quarter, 3M Company’s cash and cash equivalents were $3,185 million, up 13.7% from $2,801 million at the end of the last-reported quarter. Long-term debt balance increased 19.9% sequentially to $13,539 million.
In the reported quarter, the company generated net cash of $2,139 million, increasing 22.2% from the year-ago tally of $1,750 million. Capital used for purchasing property, plant and equipment increased 16% year over year to $377 million. Free cash flow generated was $1,762 million, increasing 23.6%.
During the third quarter, the company used $794 million for paying dividends to shareholders while repurchased $1.1 billion shares.
Outlook
3M Company has revised down its adjusted earnings guidance for 2018 from $10.20-$10.45 to $9.90-$10.00 per share.
Organic sales growth guidance has been revised to about 3% from 3-4% projected earlier. Free cash flow conversion has been revised to 90-95% from 90-100% projected earlier. Effective tax rate is anticipated to be 20-21%.
Zacks Rank & Stocks to Consider
3M Companycurrently has a Zacks Rank #4 (Sell).
Some better-ranked stocks are Macquarie Infrastructure Co. , Anthem, Inc. and Ameren Corp. (AEE - Free Report) . While Macquarie Infrastructure sports a Zacks Rank #1 (Strong Buy), Anthem and Ameren carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Macquarie Infrastructure surpassed estimates twice in the trailing four quarters with an average beat of 8.05%.
Anthem exceeded estimates in each of the trailing four quarters with an average beat of 6.65%.
Ameren surpassed estimates thrice in the trailing four quarters with an average beat of 9.76%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>