January 21, 2025
3M Company
MMM reported fourth-quarter 2024 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. The bottom line declined while the top line increased marginally on a year-over-year basis.
It’s worth noting that in April 2024, the company completed the spin-off of its Healthcare business into a separate public company.
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3M delivered adjusted earnings of $1.68 per share, which surpassed the Zacks Consensus Estimate of $1.66. The metric decreased from earnings of $1.70 per share reported in the year-ago quarter.
The company’s net revenues of $6 billion surpassed the consensus estimate of $5.8 billion. The metric increased 0.1% year over year. On an adjusted basis, revenues increased 2.2% year over year. Organic sales increased 2.1%. Foreign currency translation had a negative impact of 0.8% while acquisitions/divestitures boosted the top line by 0.9%.
Region-wise, organic sales in the Americas inched up 1.2% year over year while Asia Pacific organic sales increased 0.8%. Organic sales from businesses in Europe, the Middle East and Africa decreased 4.9%.
Revenues from Safety and Industrial totaled $2.70 billion, up 1.6% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.67 billion. Organic revenues increased 2.4% and foreign currency translation had a negative impact of 0.8%.
Revenues from Transportation & Electronics totaled $1.99 billion, reflecting a year-over-year decrease of 4.5%. The downside is attributable to a 3.9% decline in organic sales. The consensus estimate for the segment’s revenues was pegged at $1.79 billion. Foreign currency translation had a 0.6% negative impact on revenues.
Revenues from the Consumer segment increased 0.3% year over year to $1.23 billion. The consensus estimate for the segment’s revenues was pegged at $1.24 billion. Organic sales increased 1.2%. Movements in foreign currencies had an adverse impact of 0.9%.
3M Company price-consensus-eps-surprise-chart | 3M Company Quote
3M’s cost of sales decreased 1.3% year over year to $3.7 billion. Selling, general and administrative expenses decreased 11.5% to $899 million. Research, development and related expenses decreased 3.4% year over year to $282 million.
In the fourth quarter, 3M reported an operating income of $1.1 billion, up 20.7% from the year-ago period.
MMM’s adjusted operating income increased 1.4% year over year to $1.14 billion. The adjusted operating margin was 19.7% compared with 19.9% in the year-ago quarter. The adjusted tax rate was 17.9% compared with 13.6% in the year-ago period.
Exiting the fourth quarter, 3M had cash and cash equivalents of $5.6 billion compared with $5.7 billion at the end of December 2023. Long-term debt was $11.1 billion at the end of the quarter compared with $13.1 billion at the end of December 2023.
3M generated net cash of $1.8 billion from its operating activities compared with $6.7 billion in the year-ago quarter. Capital used for purchasing property, plant and equipment decreased 26.9% to $1.2 billion.
Adjusted free cash flow at the end of the quarter was $1.3 billion. Adjusted free cash flow conversion was 145% at the end of the same period.
In 2024, 3M rewarded its shareholders with $2 billion in dividend payments.
3M has issued adjusted earnings and revenue guidance for 2025. MMM expects adjusted earnings to be in the range of $7.60-$7.90 per share. The midpoint of the guided range is $7.75, which reflects an increase from earnings of $7.30 per share reported in 2024.
Adjusted organic revenues are expected to grow 2-3%.
The company currently carries a Zacks Rank #3 (Hold).
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Alcoa Corporation
AA presently sports a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 51.5%.
In the past 60 days, the consensus estimate for Alcoa’s 2024 earnings has increased 5.6%.
Applied Industrial Technologies
AIT presently carries a Zacks Rank #2 (Buy). AIT delivered a trailing four-quarter average earnings surprise of 5%.
In the past 60 days, the consensus estimate for AIT’s fiscal 2025 (ending June 2025) earnings has inched up 0.2%.
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