3M CO Quarterly Report for Q2 Ended Jun 30, 2013

Summary

3M Company reported solid results for the second quarter and first half of 2013, demonstrating resilience in a challenging economic environment. Net sales for the second quarter increased by 2.9% to $7.75 billion, driven by organic local-currency sales growth of 2.3% across most segments, bolstered by strategic acquisitions. Diluted earnings per share (EPS) rose to $1.71 in the quarter, up from $1.66 in the prior year, reflecting improved operational efficiencies and a lower effective tax rate. The company maintained a strong liquidity position with substantial cash reserves and a robust credit rating, enabling continued investment in growth initiatives and returning capital to shareholders through dividends and share repurchases. While most business segments showed positive organic sales growth, the Electronics and Energy segment experienced a decline. The company also highlighted ongoing investments in R&D and business transformation efforts, which are expected to drive future growth. Despite some headwinds from currency fluctuations and acquisition integration, 3M's diversified business model and strong operational execution position it favorably for continued performance.

Key Highlights

• 1Net sales for Q2 2013 increased 2.9% year-over-year to $7.75 billion.
• 2Diluted EPS increased to $1.71 in Q2 2013 from $1.66 in Q2 2012.
• 3Organic local-currency sales grew 2.3% company-wide, with Health Care, Industrial, Consumer, and Safety and Graphics showing positive growth.
• 4Electronics and Energy segment experienced a 2.1% decline in organic local-currency sales.
• 5The company generated $2.67 billion in operating cash flow for the first six months of 2013.
• 63M repurchased $1.995 billion of its stock in the first six months of 2013 and maintained its dividend, increasing it for the 55th consecutive year.
• 7The effective tax rate decreased to 27.4% in Q2 2013 from 30.1% in Q2 2012.

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