Post-it Maker 3M Raises Annual Outlook After Q2 Beat, Stock Soars

3M Company MMM shares are trading higher after reporting better-than-expected second-quarter 2024 results.

The company reported second-quarter net sales of $6.255 billion, a slight decline of 0.5% year-over-year. Adjusted net sales totaled $6.019 billion, up 1.1% YoY, beating the consensus of $5.878 billion.

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3M's adjusted organic sales growth was 1.2%, despite a 1.2 ppt YoY headwind from product changes and exiting small countries. Strength in electronics, industrial end-markets mixed, and consumer retail discretionary spending remained soft.

Adjusted EPS was $1.93, up from $1.39 in the prior-year quarter, beating the consensus of $1.68.

Adjusted operating margin expanded to 21.6% from 17.2% a year ago. Operating cash flow for the quarter was $1.021 billion, down from $1.509 billion a year ago. Adjusted free cash flow was $1.165 billion, with a conversion of 109%.

MMM returned $786 million to shareholders via dividends.

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Safety & Industrial reported 1.1% YoY adjusted organic growth and adjusted operating margin improvement of 40 bps to 22.6%.

Transportation & Electronics reported 3.3% adjusted organic growth and adjusted operating margin improvement of 250 bps to 22.3%.

Consumer reported organic decline of 1.4% and operating margin of 17.4%, down 80 bps YoY.

"As I look ahead, I am focused on three priorities: driving sustained organic revenue growth, increasing operational performance, and effectively deploying capital," commented William Brown, 3M Chief Executive Officer.

Fiscal 2024 Outlook: 3M continues to see adjusted total sales growth of (0.25%) to +1.75% and, on an organic basis, flat to +2%.

MMM now expects adjusted EPS of $7.00 – $7.30 (prior $6.80 – $7.30) versus the $7.17 consensus.

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