3M Company (MMM) is slated to release its first-quarter 2011 results on Tuesday, April 26. The current Zacks Consensus Estimate for first-quarter earnings per share (EPS) is $1.43, representing an annualized growth of 2.25%.
3M had outperformed the Zacks Consensus Estimate over the trailing four quarters with a positive surprise of 7.02%.
First Quarter Highlights
3M’s organic revenues improved in all its six businesses during the fourth quarter of 2010. Earnings per share for the quarter were $1.28, above the Zacks Consensus Estimate of $1.27.
For full-year 2010, earnings per share were $5.75, up 22.6% year over year.
Total revenue for the quarter increased 9.6% year over year to $6.7 billion. Organic sales volumes increased in all six of 3M’s businesses, driven by an increase of 19.8% in the Electro and Communications business and a rise of 14.7% in Display and Graphics. In terms of regions, organic volume growth was strongest in Asia-Pacific at 18.1% and Latin America at 12.2%.
Organic volumes grew 8.6% while acquisitions added 1.8% to sales, foreign exchange reduced sales by 0.5% and selling prices reduced sales by 0.3% year over year.
For full-year 2010, total revenue was $26.7 billion, an increase of 15.3% year over year.
Agreement of Estimate Revisions
In the last 7 days, only one earnings estimate was increased for 2011 and 2012 each out of 16 and 14 total estimates, respectively. There are no revisions for the first quarter of 2011.
The positive revision incorporates the company’s improving sales in every region of the world as well as in all segments. The company remains focused on inventing new products, with its scientists and innovators being an important competitive advantage throughout the world. The efforts of 3M have driven its NPVI (New Product Vitality Index) up to 34.4% in fourth-quarter 2010 compared with a weakening NPVI in the teens a few years before.
Magnitude of Estimate Revisions
In the last 7 days, the earnings estimate for 2011 declined from $6.23 to $6.21 and for 2012 was down from $6.97 to $9.94.
The estimate for the first quarter has been stable at $1.43 per share in the last 7 days.
Our Take
We believe that continued capital expenditure with new product launches and an increased focus on the emerging markets like China, India, etc. should bolster its prospects across most end markets.
In 2009, the company witnessed sales increases in four of its six business segments, but in 2010 sales were up in all business segments. Increased sales (15.3%) witnessed by the company in 2010 were $26.7 billion. The increase signifies that the recession is well and truly in the past, if not perhaps for all Western economies as a whole.
Overall, we believe 3M is all set to deliver good financial results in the first quarter of 2011. We currently maintain our Neutral recommendation on the stock, with a Zacks #2 Rank (Buy recommendation) over the next one to three months.
Be the first to comment