3M Earnings vs. Expectations
Over the course of the three months ending in March for 3M, the company generated $8.9 billion worth of total sales. This is an increase of 9.6% in total business for 3M in comparison to the same quarter last year. Another major highlight for 3M is the increase in organic local currency sales, which rose 8% in Q1, marking a major portion of total revenues.
The company also reported a GAAP and adjusted earnings of $2.77 per share. In comparison to Q1 in the 2020 fiscal year, this represents an increase of 23% and 27%, respectively. Outside of simply seeing major increases in earnings and revenue, this figure also heftily beat out analyst expectations for the business with the projected earnings for 3M only reaching $2.25 per share.
For 3M, sales in the safety and industrial business sector were a major point of growth, increasing 13.7% from Q1 in the prior fiscal year. Another notable area of business growth came from the 13.1% increase in transportation and electronics sales and the 9.8% rise in consumer product sales.
Regionally, sales in the Asia-Pacific area grew the most at 18.1%. Europe, the Middle East, and Africa saw a jump of 10.4% during Q1, while the Americas rose by just 4.5%
3M Future Outlook and Stock Market Reaction
While the Q1 earnings were incredibly strong, 3M has made no changes to its 2021 fiscal year guidance. Instead, the company continues to predict annual earnings between $9.20 and $9.70 per share. Yearly sales will rise between 5% and 8%, and 3M will reliably turn a profit.
The company also maintains expectations to reach its environmental and sustainability goals on time. 3M has pledged to reduce total carbon emissions by 50% over the next nine years and plans to be 100% carbon neutral by 2050.
3M stock is down in early premarket trading by just under 1%. The company stock is currently valued at around $198 per share, down over $1.50 from yesterday’s close.
When commenting on the Q1 earnings report, chairman and CEO of 3M Mike Roman said, “The first quarter was highlighted by broad-based organic growth, robust cash flow and a double-digit increase in earnings per share. Our four industry-leading businesses are delivering strong results, while we accelerate 3M's digital transformation and sustainability efforts with significant new goals to improve air and water quality. While uncertainty related to COVID-19 remains, we will stay focused on driving growth, building on favorable market trends, improving operational performance and delivering for customers and shareholders."
About the Author
Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.