3M Earnings on Deck

S&P 500 (NYSE:SPY) component 3M (NYSE:MMM) will unveil its latest earnings on Tuesday, October 23, 2012. 3M is a global manufacturer, technology innovator, and marketer of a variety of products.

3M Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.66 per share, a rise of 9.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.67. Between one and three months ago, the average estimate moved down. It has been unchanged at $1.66 during the last month. Analysts are projecting profit to rise by 7.7% compared to last year’s $6.42.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked profit of $1.66 per share versus a mean estimate of net income of $1.65 per share.

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Stock Price Performance: Between July 24, 2012 and October 17, 2012, the stock price rose $6.57 (7.4%), from $88.24 to $94.81. The stock price saw one of its best stretches over the last year between March 6, 2012 and March 15, 2012, when shares rose for eight straight days, increasing 5.9% (+$5.05) over that span. It saw one of its worst periods between May 1, 2012 and May 18, 2012 when shares fell for 14 straight days, dropping 6.8% (-$6.09) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 2.2% in revenue from the year-earlier quarter to $7.85 billion.

Analyst Ratings: There are eight out of 14 analysts surveyed (57.1%) rating 3M a buy. Over the last three months, the stock’s average rating has increased from hold to moderate buy.

Key Stats:

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 2.8% in the fourth quarter of the last fiscal year and 4.1% in the first quarter before increasing again in the second quarter.

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 9.6% in the third quarter of the last fiscal year, 5.7% in the fourth quarter of the last fiscal year and 2.4%in the first quarter before dropping in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.47 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 2.38 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 9.6% to $14.09 billion while liabilities rose by 5.5% to $5.71 billion.

A Look Back: In the second quarter, profit rose 0.6% to $1.17 billion ($1.66 a share) from $1.16 billion ($1.60 a share) the year earlier, exceeding analyst expectations. Revenue fell 1.9% to $7.53 billion from $7.68 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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