3M Earnings Jump on Tepid Sales Growth

3M (NYSE: MMM  ) reported fourth-quarter earnings this morning that continued the company's slow and steady growth trajectory. Revenue was up 2.4% to $7.57 billion and net income was up 12.6% to $1.1 billion, or $1.62 per share, a penny ahead of expectations.  

Management also reiterated 2014 guidance of earnings in the range of $7.30-$7.55 per share and organic local currency sales growth of 3%-6%.

Progress continues to be made on translating research and development dollars into sales growth. Organic local-currency sales growth was 3.4% in the fourth quarter, which was down from 5.8% a quarter earlier but was still a solid growth clip. CEO Inge Thulin has been pouring money into R&D, growing fourth-quarter spending for that segment at 4.8%, double revenue growth. That has translated into higher organic growth.

The downside of a highly international company like 3M is that a rising dollar has a negative impact on sales. Foreign exchange headwinds actually pulled 1.7% from 3M's growth, so had the dollar fallen this could have been an outstanding quarter.

3M is a steady manufacturer and a rock-solid dividend. Now that organic growth has reached a level in excess of 3% I think investors can be more comfortable with the company's future. This was another solid, if not spectacular, quarter for 3M.

 


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2816642, ~/Articles/ArticleHandler.aspx, 8/22/2014 11:57:47 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement