On Friday, Oct. 20, diversified industrial conglomerate 3M (NYSE:MMM) released fiscal third-quarter 2006 earnings for the period ended Sept. 30, 2006. Here are the quick-and-dirty details for the quarter.

  • Sales grew 8.8% to $5.9 billion for the quarter, of which 1.7% was attributed to acquisitions. All six business segments reported sales gains, marking the fifth consecutive quarter of positive growth.
  • Net income grew 6.4% to $894 million, yet diluted earnings per share advanced 9.3% to $1.18, as the company repurchased its shares. Earnings included a $0.01 gain from an income tax adjustment, yet still came in ahead of analyst projections.
  • Although it fell below last year's levels, free cash flow for the third quarter was nearly double reported net income.
  • For the fourth quarter, management expects organic sales growth of 4%-8%, with acquisitions adding another 1.5%. Earnings are projected at $1.10-$1.16, which excludes acquisition costs related to the purchase of Brontes Technologies.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$5,764

$5,858

$5,382

8.8%

Net Profit

--

$894

$840

6.4%

EPS

$1.12

$1.18

$1.08

9.3%

Diluted Shares

756

777

(2.7%)

*13 weeks ended September 30, 2006 and 2005

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

48.96%

51.04%

(2.08)

Operating Margin

22.91%

23.54%

(0.63)

Net Margin

15.26%

15.61%

(0.35)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$1,129

$1,873

(39.7%)

Accounts Rec.

$3,332

$3,061

8.9%

Inventory

$2,632

$2,098

25.5%


Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$1,373

$1,249

9.9%

Long-Term Debt

$1,230

$688

78.8%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

$2,517

$3,038

($521)

Capital Expenditures

$763

$660

$103

Free Cash Flow

$1,754

$2,378

($624)


Find out why Fools always follow the money.

Related Chemical Companies:

  • Danaher (NYSE:DHR)
  • GE (NYSE:GE)
  • Teleflex (NYSE:TFX)

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to further discuss any companies mentioned. The Fool has an ironclad disclosure policy.