Post Earnings Coverage as 3M’s Quarterly Sales Increased 3.7%; EPS Jumped 5.4%

Upcoming AWS Coverage on IDEX Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 28, 2017 / Active Wall St. announces its post-earnings coverage on 3M Co. (NYSE: MMM). The Company reported its first quarter fiscal 2017 results on April 24, 2017. The diversified industrial and consumer products Company surpassed top- and bottom-line expectations. Register with us now for your free membership at:

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One of 3M Co.’s competitors within the Diversified Machinery space, IDEX Corp. (NYSE: IEX), reported its Q1 earnings results on Thursday, April 20, 2017. AWS will be initiating a research report on IDEX in the coming days.

Today, AWS is promoting its earnings coverage on MMM; touching on IEX. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended March 31, 2017, 3M’s sales were $7.69 billion, up 3.7% compared to year ago same period sales of $7.41 billion. The Company’s organic local-currency sales increased 4.6%, while divestitures reduced sales by 0.4%, and Foreign currency translation impacted sales by 0.5%. 3M’s sales surpassed analysts’ consensus of $7.49 billion.

For Q1 2017, 3M’s operating income was $1.8 billion, while operating income margins for the reported quarter were 23.1%, down 1.0% on a y-o-y basis. The result included an incremental $136 million of strategic investments in growth, productivity, and portfolio actions.

3M’s Q1 2017 net income was $1.32 billion, up 3.7% compared to Q1 2016 net income of $1.28 billion. 3M reported Q1 earnings of $2.16 per share, an increase of 5.4 % versus earnings of $2.05 in the year ago comparable period. The Company’s earnings numbers surpassed Wall Street estimates of $2.07 per share.

Business Group Results

For Q1 2017, 3M’s Industrial sales increased 4.2% in USD to $2.7 billion. The segment’s organic local-currency sales increased 5.7%, foreign currency translation reduced sales by 0.8% and divestitures reduced sales by an additional 0.7%. On an organic local-currency basis, sales grew in all businesses, led by automotive and aerospace solutions, advanced materials, abrasives, industrial adhesives and tapes, and automotive aftermarket. The segment’s operating income was $625 million, up 0.5% on a y-o-y basis, while operating margin of 23.1%.

Sales in 3M’s Safety and Graphics segment totaled $1.5 billion in Q1 2017, up 3.4% in US dollars and 3.4%. The segment’s organic local-currency sales increased 4.8%, while foreign currency translation reduced sales by 0.6% and divestitures decreased sales by 0.8%. On an organic local-currency basis, Safety division’s sales increased in roofing granules, personal safety, and traffic safety and security; commercial solutions were flat. The segment’s operating income was $399 million, up 11.2% on a y-o-y basis and operating margin totaled 26.1% for the reported quarter.

During Q1 2017, 3M’s Health Care segment generated sales of $1.4 billion, up 2.3 % on a y-o-y basis in US dollars. The segment’s organic local-currency sales increased 3.1% and foreign currency translation reduced sales by 0.8%. On an organic local-currency basis, Health Care segment’s sales grew in drug delivery systems, food safety, oral care, and medical consumables, while health information systems declined. The segment’s operating income was $434 million, down 5.2% on a y-o-y basis, while operating margin was 30.5%.

3M’s Electronics and Energy segment’s had sales surged by 11.1% to $1.2 billion. The segment’s organic local-currency sales increased 11.5%, foreign currency translation reduced sales by 0.2% and divestitures decreased sales by 0.2%. On an organic local-currency basis, Electronics-related sales were up 18% with growth in both display materials and systems and electronics materials solutions. The segment’s operating income was $225 million, an increase of 15.1% on a y-o-y basis, and operating margin was 18.6%.

For Q1 2017, 3M’s Consumer segment generated sales of $1.0 billion, down 0.7% in US dollars. The segment’s organic local-currency sales decreased 1.2% and foreign currency translation increased sales by 0.5%. On an organic local-currency basis, sales grew in home improvement, consumer health care and home care, while stationery and office saw a decline. The segment’s operating income was $222 million, down 6.8% on a y-o-y basis while operating margin totaled 21.3%.

Cash Flow

3M paid $702 million in cash dividends to shareholders and repurchased $690 million of its own shares during Q1 2017. The Company’s operating cash flow was $1.0 billion, contributing to conversion of 53% of net income to free cash flow.

Outlook

3M updated its guidance for 2017 due to a strong first-quarter performance and improved outlook. The Company now forecasts organic local-currency sales growth to be 2% to 5%, up from previous guidance of 1% to 3%. For FY17, 3M expects earnings in the range of $8.70 to $9.05 per share – up 7% to 11% on a y-o-y basis compared to the prior expectation of $8.45 to $8.80. This includes a $0.05 to $0.10 benefit from the gain on sale of the pending Identity Management divestiture, net of various investments to drive growth and improve productivity. 3M affirmed its free cash flow expectation of 95% to 105%.

Stock Performance

At the closing bell, on Thursday, April 27, 2017, 3M Co.’s stock rose slightly by 0.57%, ending the trading session at $196.11. A total volume of 1.77 million shares were traded at the end of the day. In the last six months and previous twelve months, shares of the Company have rallied 19.50% and 19.95%, respectively. Moreover, the stock gained 10.54% since the start of the year. The Company’s shares are trading at a PE ratio of 24.03 and have a dividend yield of 2.40%.

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