Post-It Maker 3M Q3 Earnings: Sales Growth Slows, Margins Expand, Raises Annual Profit Outlook

3M Company MMM shares are trading higher after the company reported better-than-expected third-quarter adjusted EPS and sales and revised FY24 EPS guidance.

The company reported net sales of $6.294 billion, a slight increase of 0.4% year-over-year. Adjusted net sales totaled $6.068 billion, up 1.5% on year and marginally beating the consensus of $6.057 billion. Adjusted EPS was $1.98, up 18% Y/Y, beating the consensus of $1.90.

Adjusted organic sales growth was 1.0% in the quarter, including ~(1.0) ppt headwind from portfolio/geographic prioritization.

Adjusted operating margin expanded 1.4 percentage points to 23.0%, aided by organic growth, productivity, and restructuring.

Safety & Industrial reported 0.9% adjusted organic growth and adjusted operating margin contraction to 24.3% from 25.7% in the prior year quarter. Consumer segment reported an organic decline of 0.7%.

Operating cash flow for the quarter stood at $(1.8) billion, reflecting $3.6 billion net after-tax payments for costs of significant litigation, primarily Public Water Systems and Combat Arms Earplugs.

Adjusted free cash flow was $1.5 billion in the quarter. MMM returned $1.1 billion to shareholders via dividends and share repurchases.

Fiscal 2024 Outlook: 3M revised FY24 adjusted EPS guidance to $7.20 – $7.30 from $7.00 – $7.30 versus the consensus of $7.26.

3M revised adjusted total sales growth guidance to ~1% versus previously expected (0.25%) to +1.75% and, on an organic basis, ~1% (from flat to +2% prior).

Investors can gain exposure to the stock via ProShares Smart Materials ETF TINT and FT Vest DJIA Dogs 10 Target Income ETF DOGG.

Price Action: MMM shares are up 3.83% at $140.00 premarket at the last check Tuesday.

Photo via Shutterstock

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