3M Quarterly Results: Better-Than-Expected Earnings

Sales rises - The company reported total sales of $8.6 billion, a growth of 0.3% YoY. Organic local-currency sales increased by 1.3%. Total sales grew 4.1% in Consumer and 0.7% in Health Care and decreased 1.5% in Transportation and Electronics and 2.2% in Safety and Industrial. Organic local-currency sales grew 4.9 percent in Consumer and 1.6 percent in Health Care and decreased 0.4 percent in Transportation and Electronics, and 1.3 percent in Safety and Industrial.

Revenue based on geography - On a geographic basis, total sales grew 2.1% in the Americas and decreased 0.2% in the Asia Pacific, and 4.5% in EMEA (Europe, Middle East, and Africa). Organic local-currency sales grew 2.2% in the Americas, 1.4% in the Asia Pacific, and decreased 1.9% in EMEA.

Earning and margins - In Q4, the company reported earning per share at $2.31 per share, a decline of 4% YoY. The operating income reported was $1.6 billion with operating margins of 18.8%.

Cash Flow - The company's operating cash flow was $2.0 billion with an adjusted free cash flow of $1.5 billion contributing to adjusted free cash flow conversion of 110%. 3M returned $1.8 billion to shareholders in the fourth quarter of 2021, including $848 million in cash dividends and $938 million of gross share repurchases.

Management Commentary: 3M chairman and chief executive officer Mike Roman said, “3M delivered a solid fourth-quarter performance – with notable strength in December – as we maintained our relentless focus on serving customers in a challenging external environment. Our team effectively managed supply chain disruptions, made good progress on pricing actions and controlled costs.” 

3M Q4 Results Review:

3M has delivered strong Q4 results above street estimates. Throughout 2021 3M performed well, delivering full-year sales growth of 10%, robust cash flow and a strong increase in EPS. They also returned significant cash to shareholders, reduced debt. The company will prioritize investments in fast-growing end markets to drive long-term growth. The company is confident that they will continue to grow its business and find new ways to apply science to improve lives.

Target Price Price for 3M - The 19 analysts offering 12-month price forecasts for 3M Co have a median target of 190.00, with a high estimate of 254.00 and a low estimate of 155.00.

The share price of 3M was trading at $169.3 per share on Thursday morning.