) reported fourth quarter 2013 net income of $1,103 million or
$1.62 per share compared with $991 million or $1.41 a share in
the year-earlier quarter. The reported earnings beat the Zacks
Consensus Estimate by a penny. The increase in earnings was
driven by higher sales.
For fiscal 2013, the company reported net income of $4,659
million or $6.72 per share compared with $4,444 million or $6.32
a share in the year-earlier quarter. The reported earnings beat
the Zacks Consensus Estimate of $6.71 per share.
Net sales during the quarter were $7,569 million, up 2.4 % year
over year but below the Zacks Consensus Estimate of $7,683
million. The increase in sales was driven by 3.4% organic local
currency sales growth and acquisition benefits of 0.7%. However,
the positives were partly offset by currency impact of 1.7%. The
company reported solid organic local-currency sales growth across
all geographic regions.
For fiscal 2013, sales increased 3.2% to $30,871 million with
organic local-currency growth of 3.4%. The reported sales missed
the Zacks Consensus Estimate of $31,052 million. Acquisitions
added 1.4% to sales and foreign currency reduced sales by 1.6%.
Operating income for fourth quarter 2013 was $1.6 billion, while
operating margin was 20.9%.
segment sales increased 6.1% year over year in U.S. dollars to
$2.6 billion in the reported quarter driven by an increase in
sales in all major geographies. Organic local-currency sales
increased 5.8% year over year due to strong sales in advanced
materials, 3M Purification, aerospace and automotive aftermarket.
segment sales climbed 2.4% in U.S. dollars to $1.4 billion in the
reported quarter, aided by positive growth in all major
geographic regions. Organic local-currency sales increased 3.6%
year over year with growth in health information systems and food
safety, critical and chronic care and infection prevention.
segment revenues were $1.1 billion in the reported quarter, down
0.9% year over year in U.S. dollars as divestitures and foreign
currency translations reduced sales. Organic local-currency sales
growth of 1.3% was attributable to consumer health care and home
Safety and Graphics
segment sales rose 2.5% year over year in U.S. dollars to $1.3
billion with strong performances in Asia Pacific and Latin
America/Canada. Organic local-currency sales growth of 4.8%
benefited from roofing granules and personal safety, commercial
graphics and architectural markets.
Electronics and Energy
segment revenues were $1.3 billion in the reported quarter, down
1.0% in U.S. dollars as sales decreased in Latin America/Canada.
Organic local-currency sales edged up 0.4% driven by sales growth
in renewable energy and electrical markets.
Balance Sheet and Cash Flow
Cash and cash equivalents as of Dec 31, 2013 were $2.6 billion
compared with $2.8 billion as of Dec 30, 2012. Long-term debt
stood at $4,326 million compared with $4,916 million as of Dec,
30 2012. Free cash flow as of Dec 31, 2013 stood at $4,152
million versus $3,816 million in the prior-year period.
During the reported quarter, 3M converted 131% of net income
to free cash flow. For fiscal 2013, 3M paid $1.7 billion in cash
dividends to shareholders and repurchased $5.2 billion of its
3M expects EPS in the range of $7.30 to $7.55 with an organic
local-currency sales growth of 3%-6% in 2014. 3M also expects
free cash flow conversion to be in the range of 90 to 100%.
Going forward, the company's position will be strengthened
through increased investments in innovation and more aggressive
The market reacted positively as share price increased in
pre-market trading with a healthy beat in earnings.
3M currently has a Zacks Rank #3 (Hold). Other stocks that
look promising and are worth a look include
Carlisle Companies Inc.
Hutchison Whampoa Ltd
CRANE CO (CR): Free Stock Analysis Report
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3M CO (MMM): Free Stock Analysis Report
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