Zinger Key Points
- 3M reported Q4 adjusted sales of $5.808 billion, up 2.22% YoY, beating consensus expectations of $5.781 billion.
- Adjusted organic sales grew 2.1% despite a 70-basis-point headwind from portfolio optimization and market exits.
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3M Company MMM stock surged after the company reported better-than-expected fourth-quarter 2024 results and initiated 2025 guidance.
The company reported net sales of $6.01 billion, a slight increase of 0.13% year-over-year. Adjusted net sales totaled $5.808 billion, up 2.2% YoY, beating the consensus of $5.781 billion.
Adjusted EPS was $1.68, down 2% YoY, beating the consensus of $1.66.
Adjusted organic sales growth for the quarter was 2.1%, reflecting a 70-basis-point headwind due to product portfolio optimization initiatives and the exit from certain smaller markets.
GAAP operating income margin expanded to 18.1% from 15% a year-ago. Adjusted operating margin contracted 17 bps points to 19.7%, with adjusted business segment operating income of $1.14 billion (+1.3% YoY).
Safety & Industrial reported 2.4% adjusted organic growth and adjusted operating margin expansion to 21% from 19.7% in the prior year quarter.
Transportation & Electronics reported 2% adjusted organic growth, and the adjusted operating margin contracted to 19.4% from 20.9% a year ago. The consumer segment reported adjusted organic growth of 1.2%.
Operating cash flow for full-year 2024 stood at $1.8 billion, down from $6.68 billion. MMM returned $3.8 billion to shareholders via dividends and share repurchases.
Operating cash flow included $3.8 billion in net after-tax payments for significant litigation costs, primarily associated with Public Water Systems and Combat Arms Earplugs.
2025 Guidance: 3M anticipates adjusted total sales growth of 0.5% to 1.5%, driven by adjusted organic sales growth of 2% to 3%.
The company projects adjusted EPS in the range of $7.60 to $7.90 versus consensus of $7.78 and expects adjusted operating cash flow between $5.2 billion and $5.3 billion, resulting in approximately 100% adjusted free cash flow conversion.
Price Action: MMM shares are trading higher by 4.23% at $147 premarket on the last check Tuesday.
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