) reported record results with second quarter 2013 net sales of
$7.8 billion, improving from $7.5 billion in the year-ago
quarter. The superior performance was attributable to 2.3%
organic local-currency sales growth and acquisition benefits of
Except a negative top-line growth in Electronics and Energy
segment, all other segments reported improved performance and led
to the record quarterly sales. The company reported solid organic
local-currency sales growth across all geographic regions.
Quarterly revenues also beat the Zacks Consensus Estimate of $7.7
Net income for the reported quarter was $1,197 million or $1.71
per share compared with $1,167 million or $1.66 in the
year-earlier quarter. The reported earnings beat the Zacks
Consensus Estimate of $1.70. Operating income for second quarter
2013 was $1.7 billion, while operating margin was 22.0%.
Industrial segment sales increased 6.6% year over year in U.S.
dollars to $2.7 billion, driven by a spurt in sales in Latin
America/Canada, the U.S. and EMEA (Europe, Middle East and
Africa). Organic local-currency sales increased 3.3% year over
year due to strong sales in aerospace, industrial adhesives and
tapes and liquid filtration.
Health Care segment sales climbed 4.6% in U.S. dollars to $1.3
billion, aided by positive growth in all major geographic
regions. Organic local-currency sales increased 5.7% year over
year with healthy growth across all business lines - the
strongest being health information systems, food safety, critical
and chronic care, oral care and infection prevention.
Consumer segment revenues were $1.1 billion, up 1.4% year over
year in U.S. dollars as sales increased in all major geographic
regions. Organic local-currency sales growth of 2.9% was
attributable to consumer health care, stationery and office
Safety and Graphics segment sales rose 2.3% year over year in
U.S. dollars to $1.5 billion with strong performances in Asia
Pacific, Latin America/Canada and EMEA. Organic local-currency
sales growth of 2.0% benefited from architectural markets,
building and commercial services, and traffic safety.
Electronics and Energy segment revenues were $1.3 billion, down
3.2% in U.S. dollars as sales dipped in EMEA, the U.S. and Asia
Pacific. Organic local-currency sales decreased 2.1% as end
market remained soft throughout the quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents at quarter-end were $2.9 billion
compared with $2.8 billion as of Dec 31, 2012. Long-term debt at
quarter-end increased to $4,884 million compared with $4,916
million as of Dec, 31 2012. Free cash flow as of Jun 30, 2013
increased to $1,285 million versus $1,031 million in the
prior-year period. 3M paid $436 million in dividends and
repurchased $1.2 billion shares.
3M expects EPS in the range of $6.60 to $6.85 with an organic
local-currency sales growth of 2%-5% in fiscal 2013. The company
is expected to repurchase $3.5 billion to $4.5 billion worth of
shares, versus a previous range of $2 billion to $3 billion.
MMM currently has a Zacks Rank #4 (Sell). Other stocks that
look promising and are worth a look in the industry include H
utchison Whampoa Ltd.
Macquarie Infrastructure Company LLC
United Technologies Corp
), each carrying a Zacks Rank #2 (Buy).
HUTCHINSON WHAM (HUWHY): Get Free Report
MACQUARIE INFRA (MIC): Free Stock Analysis
3M CO (MMM): Free Stock Analysis Report
UTD TECHS CORP (UTX): Free Stock Analysis
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