3M Earnings Fall Short

Industrials

Published: April 24, 2014 9:10 am

Last Updated: April 27, 2020 3:00 pm

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3M Co. (NYSE: MMM) reported first-quarter 2014 results before markets opened Thursday. The conglomerate posted diluted earnings per share (EPS) of $1.79 on revenues of $7.8 billion. In the same period a year ago, the company reported EPS of $1.61 on revenues of $7.63 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.80 and $7.96 billion in revenues.

3M maintained its full-year earnings expectation of $7.30 to $7.55 per share, with organic local-currency sales growth of 3% to 6% (about $31.8 billion to $32.72 billion, based on 2013 revenues of $30.87 billion). Foreign currency is expected to reduce sales by approximately 1% for the year, versus a previous expectation of neutral to minus 1%.

The consensus estimates for the second quarter call for EPS of $1.91 on revenues of $8.13 billion. Analysts’ consensus full-year estimates call for EPS of $7.46 on revenues of $32.35 billion.

The company’s CEO said:

Our teams delivered positive organic growth in all business groups and geographic areas, we posted strong margins across the portfolio and we returned a record amount of cash to shareholders. At the same time we increased investments in R&D and commercialization to help secure future growth in the business.

3M’s sales in the quarter grew the most in its health care division, rising 4.8% to $1.4 billion. The industrial division grew revenue 3.1% to $2.8 billion, and the safety and graphics division sales rose 1.7% to $1.4 billion. The consumer division’s sales dropped 0.2% to $1.1 billion, with stationery and office supplies leading the decline.

The slight miss on EPS and the shortfall in revenues likely will weigh on 3M’s share price.

Shares were down about 2.4% in premarket trading Thursday, at $135.63. The current 52-week range is $102.89 to $140.43. Thomson Reuters had a consensus analyst price target of around $141.20 before the report.

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