3M's Down-Home Growth: Fool by Numbers
By Anders Bylund
January 29, 2008
Recommended (1)
On Jan. 29, Motley Fool Inside Value recommendation 3M (NYSE: MMM) released earnings for the fiscal year ended Dec. 31, 2007.
- Finally, here's a major U.S. business that managed to outpace international sales growth with its domestic take (though much of the U.S. boost came via acquisitions). The company grew sales from continuing operations by 6.1% abroad -- in local currency -- and 6.7% at home.
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Return on invested capital shrank to 21.4% for 2007 from 22.5% in 2006. That's still a good ratio for 3M, historically speaking, and way better than the below-20% numbers that were routine five years ago.
- Our Motley Fool CAPS players love multinational conglomerates, judging by 3M and its immediate neighbors. Pop on over to see why or add your own insights to the debate.
(Figures in millions, except per-share data)
Income Statement Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Sales
|
$24,462
|
$22,923
|
6.7%
|
|
Net Profit
|
$4,096
|
$3,851
|
6.4%
|
|
EPS
|
$5.60
|
$5.06
|
10.7%
|
|
Diluted Shares
|
732
|
761
|
(3.8%)
|
Get back to basics with the income statement.
Margin Checkup
|
FY 2007
|
FY 2006
|
Change*
|
|
Gross Margin
|
47.9%
|
48.9%
|
(1.0)
|
|
Operating Margin
|
25.3%
|
24.9%
|
0.5
|
|
Net Margin
|
16.7%
|
16.8%
|
(0.1)
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
FY 2007
|
FY 2006
|
Change
|
|
Cash + ST Invest.
|
$2,475
|
$1,918
|
29%
|
|
Accounts Rec.
|
$3,362
|
$3,102
|
8.4%
|
|
Inventory
|
$2,852
|
$2,601
|
9.7%
|
|
Liabilities
|
FY 2007
|
FY 2006
|
Change
|
|
Accounts Payable
|
$1,505
|
$1,402
|
7.3%
|
|
Long-Term Debt
|
$4,019
|
$1,047
|
283.9%
|
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Cash From Ops.
|
$4,275
|
$3,839
|
11.4%
|
|
Capital Expenditures
|
$1,422
|
$1,168
|
21.7%
|
|
Free Cash Flow
|
$2,853
|
$2,671
|
6.8%
|
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap (in $billions)
|
Trailing P/E Ratio
|
CAPS Rating
|
|
General Electric (NYSE: GE)
|
$351.4
|
16.1
|
****
|
|
3M
|
$55.9
|
14.0
|
*****
|
|
Danaher (NYSE: DHR)
|
$23.8
|
17.8
|
*****
|
|
Tyco International (NYSE: TYC)
|
$19.1
|
N/A
|
***
|
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