3M Co. Earnings: What Investors Want to See

3M (MMM 0.86%) will release its quarterly report on Thursday, and from all indications, investors expect the same slow but steady growth that the conglomerate has given them for years. Yet some shareholders worry that 3M hasn't been as aggressive as General Electric (GE -3.19%), Johnson & Johnson (JNJ 1.49%), and other competitors in making ambitious steps forward to try to drive future growth.

3M is well-known for the innovative products it has developed over the decades, with adhesives and office products that still dominate the offerings of its competitors. Yet even though 3M has done a good of identifying acquisition targets to help grow its business, the company hasn't delivered the organic growth rates that investors would prefer to see. The big question facing 3M is whether it can find focus among its diverse set of business divisions and concentrate its innovative efforts toward developing industry-changing products in high-profile areas. Let's take an early look at what's been happening with 3M over the past quarter and what we're likely to see in its report.

New 3M high-performance multi-touch display. Source: 3M.

Stats on 3M

Source: Yahoo! Finance.

Can 3M earnings growth accelerate this quarter?
In recent months, analysts have grown more optimistic about 3M earnings, raising their fourth-quarter estimates by a penny per share and boosting their full-year 2014 projections by about 1%. The stock has also climbed, rising 5% since late October despite a recent pullback that wiped out bigger gains.

3M's third-quarter report included solid fundamentals that boosted the company's overall growth. A 5.6% jump in sales led to a gain of almost 8% in earnings per share. Organic sales growth rose at several key divisions, with safety-and-graphics and health care taking the lead. The company's electronics and energy segment had the slowest growth, but even there, accelerating gains from year-ago levels were promising, especially in light of slower revenue gains from similar segments at General Electric and Dow peer DuPont (DD).

The big news for shareholders came last month, when 3M said it would boost its dividend by 35% and spend an additional $22 billion on stock buybacks over the next five years. 3M expects to finance these massive capital returns by producing earnings growth in the 9%-11% range through 2017, and if it's successful, 3M could see its stock continue soaring through a combination of falling share counts and rising income.

To achieve that growth, 3M will have to come up with some new ideas. At the Consumer Electronics Show earlier this month, the company came out with a number of interesting ideas, including large-format digital signs that allow multiple users to use touch-screen interfaces at the same time as well as screen-privacy devices for both desktop computers and mobile devices. As 3M continues to come up with interesting new applications for its technology, it could further enhance its growth rates, finding a niche similar to what General Electric has found in energy and aerospace, and what Johnson & Johnson is increasingly finding in the pharmaceutical space.

In the 3M report, watch to see whether the company successfully delivers not only on its growth-rate numbers, but also on the interesting ideas that investors want to see. Financials aside, what 3M investors really want is a return of the wow factor that led to the company's most lucrative growth phases in the past.

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