3M Q1 Results Surpass Expectation, Cuts FY22 GAAP EPS Outlook

3M Co MMM reported first-quarter FY22 net sales of $8.83 billion, a slight decrease of 0.3% year-over-year, +2% on an Organic basis, beating the consensus of $8.74 billion.
Sales by segments: Safety and Industrial $3.05 billion (-1.5% Y/Y), Transportation and Electronics $2.34 billion (-2.3% Y/Y), Health Care $2.12 billion (+2.6% Y/Y) and Consumer $1.31 billion (+1.9% Y/Y).
Operating income declined by 17.7% Y/Y to $1.64 billion and the margin compressed by 390 basis points to 18.6%.
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Adjusted EPS was $2.65, down 10% Y/Y, beating the consensus of $2.31.
3M generated cash from operating activities for Q1 was $1.01 billion, compared to $1.69 billion a year ago.
Adjusted free cash flow was $715 million, down 50.3% Y/Y.
Adjusted EBITDA was $2.35 million (-9.2% Y/Y) and the margin contracted by 263 bps to 26.6%.
The company returned $1.6 billion to shareholders via dividends and gross share repurchases during the quarter.
FY22 Outlook: 3M expects GAAP EPS of $9.89 - $10.39 versus prior expectation of $10.15 - $10.65. Adjusted EPS outlook of $10.75 - $11.25 versus the consensus of $10.31.
The company's full-year organic sales growth and free cash flow conversion ranges remain unchanged.
Price Action: MMM shares traded lower by 2.93% at $144.24 on the last check Tuesday.