3M Delivers Strong Second-Quarter Results; Company Updates Full-Year 2024 Earnings Guidance
3M (NYSE: MMM) reported strong second-quarter results for 2024, with adjusted EPS from continuing operations up 39% year-on-year to $1.93. The company's sales reached $6.3 billion, down 0.5% YoY, while adjusted sales of $6.0 billion showed organic growth of 1.2% YoY. 3M's operating cash flow was $1.0 billion, with adjusted free cash flow of $1.2 billion.
Notably, 3M has updated its full-year 2024 adjusted EPS guidance to a range of $7.00 to $7.30, up from the previous forecast of $6.80 to $7.30. The company maintains its outlook for adjusted total sales growth between -0.25% and +1.75%, and adjusted organic sales growth of flat to +2%.
CEO William Brown emphasized the company's focus on driving sustained organic revenue growth, increasing operational performance, and effective capital deployment.
- Adjusted EPS from continuing operations increased by 39% YoY to $1.93
- Adjusted operating income margin improved by 4.4 percentage points YoY to 21.6%
- Adjusted free cash flow of $1.2 billion
- Updated full-year 2024 adjusted EPS guidance to $7.00-$7.30, raising the lower end
- Returned $786 million to shareholders via dividends and share repurchases
- Total sales decreased by 0.5% YoY to $6.3 billion
- Organic sales declined by 0.3% YoY
- Currency translation had a negative 1.4% impact on sales
3M's Q2 2024 results demonstrate a mixed but generally positive performance. The company reported adjusted EPS of
However, the top-line performance was less impressive. Sales declined slightly by
The company's cash flow performance was strong, with operating cash flow of
3M's updated full-year guidance is particularly noteworthy. The company has raised the lower end of its adjusted EPS forecast to
Overall, while 3M's ability to improve profitability and generate cash is commendable, the lack of substantial top-line growth remains a concern. Investors should closely monitor the company's efforts to drive organic growth in the coming quarters.
3M's Q2 results reveal interesting market dynamics. The company's
The
Notably, the substantial increase in GAAP EPS (from
The
3M's ability to maintain its sales outlook while raising the lower end of its EPS guidance suggests that the company is finding ways to enhance profitability in a challenging market environment. This could be through cost-cutting measures, pricing strategies, or a shift towards higher-margin products.
Investors should keep an eye on 3M's progress in driving organic growth and its ability to navigate ongoing litigation issues, as these factors will likely play important roles in the company's future performance.
- Sales of
, down$6.3 billion 0.5% YoY - Adjusted sales of
with organic growth up$6.0 billion 1.2% YoY - GAAP EPS from continuing operations of
, up$2.17 117% YoY - Adjusted EPS from continuing operations of
, up$1.93 39% YoY - Operating cash flow of
with adjusted free cash flow of$1.0 billion $1.2 billion - Updates full-year 2024 adjusted EPS from continuing operations to
to$7.00 from$7.30 to$6.80 $7.30
"We delivered another strong quarter with adjusted earnings growth up double-digits and robust cash generation. I want to thank 3M employees for their exceptional execution, which we expect to continue in the second half of the year," said William Brown, 3M Chief Executive Officer. "As I look ahead, I am focused on three priorities: driving sustained organic revenue growth, increasing operational performance, and effectively deploying capital. I have long admired 3M's track record of innovation and am excited to be leading this great company and by the opportunities ahead."
Second-Quarter Highlights:
Q2 2024 | Q2 2023 | |||||||
GAAP EPS from continuing operations (GAAP EPS) | $ 2.17 | $ (12.94) | ||||||
Special items: | ||||||||
Net costs for significant litigation | 0.44 | 14.43 | ||||||
(Increase) decrease in value of Solventum ownership | (2.00) | — | ||||||
Pension risk transfer charge | 1.09 | — | ||||||
Other special items, net | 0.23 | (0.10) | ||||||
Adjusted EPS from continuing operations (Adjusted EPS) | $ 1.93 | $ 1.39 | ||||||
Memo: | ||||||||
GAAP operating income margin | 20.3 % | (148.9) % | ||||||
Adjusted operating income margin | 21.6 % | 17.2 % |
- GAAP EPS of
and operating margin of$2.17 20.3% . - Adjusted EPS of
, up$1.93 39% year-on-year. - Adjusted operating income margin of
21.6% , an increase of 4.4 percentage points year-on-year.
GAAP | Adjusted (Non-GAAP) | |||||||
Net sales (Millions) | ||||||||
Sales change | ||||||||
Total sales | (0.5) % | 1.1 % | ||||||
Components of sales change: | ||||||||
Organic sales1 | (0.3) % | 1.2 % | ||||||
Acquisitions/divestitures | 1.2 % | 1.3 % | ||||||
Translation | (1.4) % | (1.4) % | ||||||
Adjusted sales excludes manufactured PFAS products. | ||||||||
1Above adjusted organic sales increase includes a 120 basis point headwind from product portfolio initiatives and exit |
- Sales of
, down$6.3 billion 0.5% year-on-year, with organic sales down0.3% year-on-year. - Adjusted sales of
, up$6.0 billion 1.1% year-on-year with adjusted organic sales up1.2% year-on-year. - Operating cash flow of
; adjusted free cash flow of$1.0 billion .$1.2 billion - 3M returned
to shareholders via dividends and share repurchases.$786 million
This document includes reference to certain non-GAAP measures. See the "Supplemental Financial Information Non-GAAP Measures" section for applicable information.
Updated Full-Year 2024 Earnings Outlook
3M updated its full-year adjusted earnings expectations given the company's strong operational execution in the first half of the year. The 2024 earnings outlook below reflects the continuing operations of 3M.
Prior 2024 forecast2 | Current 2024 forecast2 | |||||||||||||
Adjusted total sales growth | ( | ( | ||||||||||||
Adjusted organic sales growth | flat to + | flat to + | ||||||||||||
Adjusted EPS |
2As further discussed at 6 within the "Supplemental Financial Information Non-GAAP Measures" sections, 3M cannot, without unreasonable effort, forecast certain items required to develop meaningful comparable GAAP financial measures and, therefore, does not provide them on a forward-looking basis reflecting these items. |
Conference Call
3M will conduct an investor teleconference at 9 a.m. EDT (8 a.m. CDT) today. Investors can access this conference via the following:
- Live webcast at https://investors.3M.com
- Webcast replay at https://investors.3m.com/financials/quarterly-earnings
Consolidated Financial Statements and Supplemental Financial Information Non-GAAP Measures
View the Financial Statement Information on 3M's website: https://investors.3m.com/financials/quarterly-earnings
Forward-Looking Statements
This news release contains forward-looking statements. You can identify these statements by the use of words such as "plan," "expect," "aim," "believe," "project," "target," "anticipate," "intend," "estimate," "will," "should," "could," "would," "forecast" and other words and terms of similar meaning. Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic, political, regulatory, international trade, geopolitical, capital markets and other external conditions and other factors beyond the Company's control, including inflation, recession, military conflicts, and natural and other disasters or climate change affecting the operations of the Company or its customers and suppliers; (2) foreign currency exchange rates and fluctuations in those rates; (3) liabilities and the outcome of contingencies related to certain fluorochemicals; known as "PFAS," including liabilities related to claims, lawsuits, and government regulatory proceedings concerning various PFAS-related products and chemistries, as well as risks related to the Company's plans to exit PFAS manufacturing and discontinue use of PFAS across its product portfolio; (4) risks related to the class-action settlement to resolve claims by public water suppliers in
About 3M
3M (NYSE: MMM) believes science helps create a brighter world for everyone. By unlocking the power of people, ideas and science to reimagine what's possible, our global team uniquely addresses the opportunities and challenges of our customers, communities, and planet. Learn how we're working to improve lives and make what's next at 3M.com/news.
Please note that the company announces material financial, business and operational information using the 3M investor relations website, SEC filings, press releases, public conference calls and webcasts. The company also uses the 3M News Center and social media to communicate with our customers and the public about the company, products and services and other matters. It is possible that the information 3M posts on the News Center and social media could be deemed to be material information. Therefore, the company encourages investors, the media and others interested in 3M to review the information posted on 3M's news center and the social media channels such as @3M or @3MNews.
Contacts
3M
Investor Contacts:
Bruce Jermeland, 651-733-1807
or
Diane Farrow, 612-202-2449
or
Eric Herron, 651-233-0043
Media Contact:
Sean Lynch, slynch2@mmm.com
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SOURCE 3M Company
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