Summary
3M Company reported a solid second quarter of 2011, with net sales increasing by 14.1% to $7.68 billion year-over-year. This growth was broad-based across most of its business segments and geographic regions, driven by a combination of organic volume, acquisitions, and favorable currency effects. The Industrial and Transportation segment, and Safety, Security and Protection Services segment showed particularly strong performance. Despite the overall positive sales trend, operating income margins saw a slight decrease due to factors such as increased pension and postretirement expenses, foreign currency impacts, and the net effect of selling price changes versus raw material inflation. The company also noted headwinds from the natural disaster in Japan, which impacted sales growth and operating margins. Nevertheless, net income attributable to 3M rose to $1.16 billion, or $1.60 per diluted share, up from $1.12 billion, or $1.54 per diluted share, in the prior year's quarter. The company reiterated its full-year sales outlook and continued its commitment to shareholder returns through dividends and share repurchases.
Financial Highlights
52 data points| Revenue | $7.68B |
| Cost of Revenue | $4.04B |
| Gross Profit | $3.64B |
| SG&A Expenses | $1.58B |
| Operating Expenses | $6.03B |
| Operating Income | $1.66B |
| Net Income | $1.16B |
| EPS (Basic) | $1.63 |
| EPS (Diluted) | $1.60 |
| Shares Outstanding (Basic) | 713.40M |
| Shares Outstanding (Diluted) | 726.50M |
Key Highlights
- 1Net sales increased by 14.1% to $7.68 billion in Q2 2011, compared to $6.73 billion in Q2 2010, with strong performance across most segments and geographies.
- 2Net income attributable to 3M increased to $1.16 billion ($1.60 per diluted share) in Q2 2011, from $1.12 billion ($1.54 per diluted share) in Q2 2010.
- 3The Industrial and Transportation segment led growth with a 24.6% increase in net sales, followed by Safety, Security and Protection Services (19.7%) and Health Care (14.3%).
- 4Acquisitions contributed 4.0% to worldwide sales growth, while favorable currency effects added 6.1% in the second quarter.
- 5Operating income margins decreased to 21.6% from 23.7% year-over-year, impacted by increased pension/postretirement expenses and foreign currency effects.
- 6The company experienced headwinds from the natural disaster in Japan, which reduced second-quarter 2011 sales growth by an estimated 2.4 percentage points.
- 73M repurchased $1.358 billion of treasury stock in the first six months of 2011, demonstrating a commitment to shareholder returns.