3M Company Earnings Cheat Sheet: Second Straight Quarter of Increasing Profit

S&P 500 (NYSE:SPY) component 3M Company (NYSE:MMM) reported its results for the second quarter. 3M Co. is a global manufacturer, technology innovator and marketer of a variety of products.

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3M Company Earnings Cheat Sheet for the Second Quarter

Results: Net income for the diversified machinery company rose to $1.16 billion ($1.60 per share) vs. $1.12 billion ($1.54 per share) in the same quarter a year earlier. This marks a rise of 3.5% from the year earlier quarter.

Revenue: Rose 14.1% to $7.68 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MMM fell in line with the mean analyst estimate of $1.60 per share. Analysts were expecting revenue of $7.6 billion.

Quoting Management: “We posted record second-quarter sales and earnings per share and generated significant free cash flow in the quarter, and we did so in the face of some sizable headwinds,” said George W. Buckley, 3M chairman, president and chief executive officer. “Most significant was the impact of the Japan earthquake, which was in line with our projections. In addition, a larger-than-anticipated contraction in LCD TV end-market demand affected our sales, reflecting a tighter consumer electronics market as OEMs work to reduce channel inventories and lower their unit costs. Without these two impacts, organic sales growth would have been eight percent, so underlying strength remains.”

Key Stats:

Gross margin shrank 1.6 percentage points to 47.4%. The contraction appeared to be driven by increased costs, which rose 17.6% from the year earlier quarter while revenue rose 14.1%.

Revenue has risen the past four quarters. Revenue increased 15.2% to $7.31 billion in the first quarter. The figure rose 9.6% in the fourth quarter of the last fiscal year from the year earlier and climbed 11% in the third quarter of the last fiscal year from the year-ago quarter.

The company fell in line with estimates last quarter after beating forecasts in the previous quarter with net income of $1.49 versus a mean estimate of net income of $1.43 per share.

Net income has increased 15.5% year over year on average across the last five quarters. The biggest gain came in the second quarter of the last fiscal year, when income climbed 43.2% from the year earlier quarter.

Competitors to Watch: General Electric Company (NYSE:GE), Danaher Corporation (NYSE:DHR), Johnson & Johnson (NYSE:JNJ), DENTSPLY Intl. Inc. (NASDAQ:XRAY), Tyco International Ltd. (NYSE:TYC), Carlisle Companies, Inc. (NYSE:CSL), Honeywell Intl. Inc. (NYSE:HON), Siemens AG (NYSE:SI), and E.I. du Pont de Nemours & Co. (NYSE:DD).

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(Source: Xignite Financials)