Summary
For the nine months ended September 30, 2018, 3M Company (MMM) reported total net sales of $24.82 billion, a 4.9% increase compared to the same period in 2017. Diluted earnings per share (EPS) for the nine months were $6.61, down from $7.08 in the prior year, largely impacted by a $897 million pre-tax charge related to the resolution of a Minnesota natural resource damages lawsuit and a $217 million measurement period adjustment for the Tax Cuts and Jobs Act (TCJA). Excluding these significant items, adjusted diluted EPS increased by 14.8% year-over-year. The company's balance sheet remains strong, with total assets of $37.28 billion at the end of the third quarter. Financially, 3M generated $4.18 billion in operating cash flow year-to-date and continued its commitment to shareholder returns through share repurchases totaling $3.6 billion and a 16% dividend increase. The company also successfully completed the divestiture of its Communication Markets Division, which contributed a pre-tax gain of $494 million. Key operational highlights include varied performance across segments, with Industrial sales up 4.6% and Safety and Graphics sales up 12.6% year-to-date, driven partly by the Scott Safety acquisition. The Electronics and Energy segment saw a notable 64.1% operating income increase due to the Communications Market Division divestiture gain, while Health Care sales grew moderately. The Consumer segment experienced a slight sales increase, with operating income margins improving year-over-year. Management is focused on investing in organic growth, innovation, and strategic acquisitions, while managing operational efficiencies and navigating various litigation and environmental matters.
Financial Highlights
54 data points| Revenue | $8.15B |
| Cost of Revenue | $4.16B |
| Gross Profit | $3.99B |
| SG&A Expenses | $1.55B |
| Operating Expenses | $6.14B |
| Operating Income | $2.02B |
| Interest Expense | $85.00M |
| Net Income | $1.54B |
| EPS (Basic) | $2.64 |
| EPS (Diluted) | $2.58 |
| Shares Outstanding (Basic) | 585.60M |
| Shares Outstanding (Diluted) | 598.40M |
Key Highlights
- 1Total net sales for the nine months ended September 30, 2018, reached $24.82 billion, an increase of 4.9% year-over-year.
- 2Diluted EPS for the nine months was $6.61, a decrease from $7.08 in the prior year, primarily due to a significant charge related to a Minnesota natural resource damages lawsuit resolution and TCJA adjustments.
- 3Excluding these non-recurring items, adjusted diluted EPS increased by 14.8% year-over-year, indicating underlying operational strength.
- 4The company generated $4.18 billion in operating cash flow year-to-date, supporting robust shareholder returns through $3.6 billion in share repurchases and a 16% dividend increase.
- 5The divestiture of the Communication Markets Division in June 2018 generated a pre-tax gain of $494 million and contributed to a 64.1% increase in operating income for the Electronics and Energy segment.
- 6Sales performance varied by segment: Industrial sales increased 4.6% and Safety and Graphics sales increased 12.6% year-to-date, while Health Care and Consumer segments showed more modest growth.
- 73M continues to invest in innovation and organic growth, alongside strategic acquisitions, while managing significant legal and environmental matters, including ongoing litigation related to respiratory masks and PFAS compounds.