3M (MMM) Earnings Review

3M ONTADNSTVDS Behussen Earnings Review (Third Quarter of Fiscal Year 2013) 3M's third quarter earnings (3QFY13) were released on October 24, 2013. The company posted EPS of $1.78 for the quarter, compared to the $1.75 forecasted by analysts. Sales also topped analysts' expectations by $70 million, with revenues totaling $7.92 billion a third quarter record for the company. EPS and revenues were 7.8% and 5.6% higher over the earlier year. 3M's stock price edged up 11 cents, or 0.1% to $123.30 after the results were announced. Segment Revenues 3QFY13 YoY Industrial & Transportation $2.7bn 8.6% Electronics and Energy $1.4bn 2.5% Safety and Graphics $1.4bn 6.7% Healthcare $1.3bn 6.7% Consumer & Office $1.2bn 5.5% Industrial & Industrial and Transportation segment sales were Transporation 8.7% above the same quarter last year, with revenues totaling $2.67 billion. However, sales growth failed to translate into an increase in operating income, as operating margins fell 180bps YoY to 21.3%. As a result, operating income was flat at $568 million compared to the same quarter last year. Topline growth was driven by double-digit growth in the aerospace and automotive OEM businesses. Profits from new synergies continued to surpass initial expectations, with Ceradyne (acquired last year) contributing 4.1% of the segment's growth this quarter. However, these positive developments were offset by lower sales in conflict zones, due to the impact of the US' drawdown of troops deployed in war territories. Electronics and Energy: The Electronics and Energy business posted 2.5% growth in sales over the earlier year quarter to $1.4 billion. The segment's operating income also rose 3% to $300 million. Operating margins were flat at 20.7%. The topline was boosted by record sales of 3M's ACCR Overhead Power Conductor, and organic sales growth of 6% and 3% in the Asia Pacific and Latin America regions. Safety and Graphics: The Safety and Graphics segment recorded 6.7% growth in sales compared to same quarter last year, with revenues from the division totaling $1.45 billion. Operating income rose by 7.3% YoY to $315 million, while operating margins were flat at 21.8%. Growth in the sector was aided by double-digit growth in sales of roofing granules and personal safety products. The recently-acquired Federal Signal Technologies Group (FSTech) contributed 0.9% of the growth this quarter. Healthcare: The Healthcare segment's revenues grew 5.5% sequentially to $1.33 billion.operating income was 6.7% higher than last year at $426 million, and operating margins improved 40 basis points over the comparable year-ago quarter. Growth in the segment can be attributed to strong performance of food safety, drug delivery and critical and chronic care products. Consumer & Office: 2.1% YoY to $1.15 billion. Operating income was The Consumer segment's sales grew 0.6% higher compared to the same quarter last year at $247 million, while the operating margin was narrower by 30 basis points at 21.5%. Growth was aided by strong sales from the home care and stationery and office supplies subdivision. Guidance 3M's management revised its earnings guidance for 2013 to $6.65-$6.75 from its previous range of $6.60-$6.80 per share. The company expects further increases in sales volumes, along with price realization and cost synergies from the Ceradyne acquisition. SOURCES: BIDNESS Company Data, SEC filings, Bloomberg Professional Services etc. DISCLAIMER: Bidness Etc(TM) and related marks are owned by Bidness Etc. Any other trademarks appearing on this website are the property of their respective owners, and are not used to indicate the origin of goods or services offered or provided by Bidness Etc herein or to suggest approval for or affiliation with Bidness Etc.