3M Beats EPS and Revenue Forecasts in Q2, Ups Guidance for Full Year 2024

3M Co. (NYSE: MMM) has reported robust second-quarter results for 2024, with several key metrics showing significant improvement.

3M Co. (NYSE:MMM) reported strong second-quarter results for 2024, with several key metrics showing significant improvement.

The company’s sales reached $6.3 billion, a slight decline of 0.5% year-over-year. Adjusted sales, which exclude manufactured PFAS products, were $6.0 billion, reflecting an organic growth of 1.2% year-over-year. This performance indicates a modest but positive growth trajectory amidst challenging market conditions.

The company’s earnings per share (EPS) from continuing operations saw a substantial increase. GAAP EPS rose to $2.17, marking a 117% year-over-year increase, while adjusted EPS climbed to $1.93, up 39% from the previous year. Operating cash flow was reported at $1.0 billion, with adjusted free cash flow at $1.2 billion. These figures underscore 3M’s strong cash generation capabilities and efficient operational execution.

“I want to thank 3Mers for their exceptional performance in the first half of the year. We are focused on driving sustained organic revenue growth, enhancing operational performance and deploying capital effectively,” said Bill Brown, 3M CEO. “Our performance to date positions us well for the remainder of the year, and we continue to execute our strategy from a position of strength.”

When comparing 3M’s current performance against market expectations, the company has exceeded projections. Analysts had anticipated an EPS of $1.67, but 3M delivered an adjusted EPS of $1.93, surpassing expectations by a significant margin. This 39% year-over-year increase in adjusted EPS highlights 3M’s ability to perform even in a competitive and volatile market environment.

Revenue expectations were set at $5.87 billion, but 3M reported actual sales of $6.3 billion, again exceeding forecasts. Even after adjusting for certain items, the adjusted sales figure of $6.0 billion still surpasses the expected revenue.

The company’s GAAP operating income margin also improved significantly, standing at 20.3% compared to a negative margin in the previous year. The adjusted operating income margin increased by 4.4 percentage points year-over-year to 21.6%. These improvements in profitability metrics reflect 3M’s successful cost management and operational efficiency strategies.

3M has updated its full-year 2024 earnings guidance based on the strong operational execution observed in the first half of the year. The company now expects adjusted EPS from continuing operations to be in the range of $7.00 to $7.30, up from the previous forecast of $6.80 to $7.30. This revision indicates 3M’s confidence in its ability to sustain its growth momentum and deliver strong financial performance.

The company maintained its adjusted total sales growth forecast at a range of -0.25% to +1.75% and its adjusted organic sales growth outlook at flat to +2%. These stable projections suggest that 3M anticipates continued steady performance despite potential market fluctuations and economic challenges. The company’s strategic focus on innovation and operational excellence is expected to drive these results.

“Our innovation pipeline remains robust, and we continue to advance promising opportunities across our portfolio,” Brown added. “We are also pleased to announce that the board of directors has authorized an increase in the share repurchase program by an additional $2 billion, bringing the total program authorization to $6 billion.”

Throughout the first half of 2024, 3M generated a total of $2.0 billion in operating cash flow from continuing operations. The company used these funds to pay dividends, repurchase shares and reduce debt, ultimately returning $1.5 billion to shareholders. As of June 30, 2024, 3M had $3.8 billion remaining under its share repurchase authorization.

3M’s commitment to returning value to shareholders is evident once again, as the company returned $786 million to shareholders through dividends and share repurchases in the second quarter.

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