10-QPeriod: Q1 FY2013

3M CO Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 2, 2013For Securities:MMM

Summary

3M Company reported solid financial results for the first quarter of 2013, with net income attributable to 3M reaching $1.129 billion, or $1.61 per diluted share, a slight increase from the prior year's first quarter. Total sales grew by 2.0% to $7.6 billion, driven by organic local-currency sales growth of 2.1% across four of its five business segments, despite a challenging economic environment and a strong U.S. dollar. Acquisitions contributed positively to sales growth, though currency impacts presented a headwind. The company demonstrated strong operational cash flow generation of $994 million and maintained a healthy liquidity position. 3M continued its commitment to shareholder returns through a 7.6% increase in its quarterly dividend and authorized a significant new stock repurchase program of up to $7.5 billion. While operating margins saw a slight decrease year-over-year due to factors including lower factory utilization and acquisition impacts, the overall performance indicates resilience and effective management in a dynamic global market.

Financial Highlights

51 data points
Beta

Revenue

$7.63B

48.0% Gross Margin

Net Income

$1.13B

14.8% Net Margin

EPS (Diluted)

$1.61

Total Assets

$34.03B

Cash & Equivalents

$2.93B

Free Cash Flow

$670.00M

Financial Statements
Beta
Revenue$7.63B
Cost of Revenue$3.97B
Gross Profit$3.67B
SG&A Expenses$1.59B
Operating Expenses$5.99B
Operating Income$1.65B
Net Income$1.13B
EPS (Basic)$1.63
EPS (Diluted)$1.61
Shares Outstanding (Basic)691.10M
Shares Outstanding (Diluted)702.10M

Key Highlights

  • 1Net income attributable to 3M increased slightly to $1.129 billion ($1.61 per diluted share) in Q1 2013, up from $1.125 billion ($1.59 per diluted share) in Q1 2012.
  • 2Total sales grew 2.0% to $7.6 billion, with organic local-currency sales increasing by 2.1%.
  • 3Four out of five business segments reported organic local-currency sales growth.
  • 4Operating cash flow was strong at $994 million, an increase of $166 million compared to the prior year's first quarter.
  • 5The company announced a 7.6% increase in its quarterly dividend and authorized a new $7.5 billion stock repurchase program.
  • 6Operating margins slightly decreased to 21.6% from 21.8% year-over-year, impacted by lower factory utilization and acquisition integration.
  • 7The Electronics and Energy segment experienced a sales decline of 3.3% due to weakness in consumer electronics demand.

Frequently Asked Questions

3M reported a 2.0% increase in total sales, reaching $7.6 billion for the first quarter of 2013. This growth was primarily driven by organic local-currency sales growth of 2.1%, with acquisitions adding another 1.7% to sales. However, foreign currency translation negatively impacted sales by 1.8%.

Net income attributable to 3M was $1.129 billion, or $1.61 per diluted share, a marginal increase from $1.125 billion, or $1.59 per diluted share, in the first quarter of 2012. While operating income saw a slight increase of 0.7% to $1.646 billion, the operating margin slightly decreased to 21.6% from 21.8% due to factors like lower factory utilization and integration costs from recent acquisitions.

3M continues to prioritize shareholder returns. In February 2013, the Board of Directors approved a 7.6% increase in the quarterly dividend, bringing the annual dividend to $2.54 per share, marking the 55th consecutive year of dividend increases. Additionally, a new stock repurchase program of up to $7.5 billion was authorized, demonstrating a commitment to share buybacks.

Four of 3M's five business segments demonstrated organic local-currency sales growth. The strongest performers were Latin America/Canada (7.3%), followed by the United States (2.3%), and Asia Pacific (1.9%). Within the segments, Health Care showed robust 4.0% organic local-currency sales growth, followed by Consumer (3.7%), Industrial (2.9%), and Safety and Graphics (2.3%). The Electronics and Energy segment was an exception, experiencing a 2.2% decline in organic local-currency sales due to weakness in consumer electronics.