Shares of 3M Co. MMM were down Tuesday morning despite the company releasing earnings above analysts' estimates.
The third-quarter report from the manufacturing conglomerate showed revenue at $8.35 billion, surpassing Wall Street estimates of $8.32 billion. Earnings per share settled at $2.43, which also beat Refinitiv estimates of $2.26 per share. However, earnings are still down 10.7% on a GAAP basis according to the report.
Total sales grew 7.7% in the Americas and 4.4% in Europe, Africa and the Middle East year over year. In the Asia Pacific region, the company's sales saw a decline of 0.6% year over year.
"Our third-quarter performance demonstrated once again the strength of the 3M model as we executed well, served customers and continued to fight the pandemic," Chairman and CEO Mike Roman said. "Though economic uncertainty and challenges due to the Covid-19 pandemic remain, we returned to positive organic sales growth with sequential improvement across businesses and geographies. We posted another quarter of robust cash flow, aggressively managed costs and further strengthened our balance sheet."
The company saw sales growth across three of the four industries the company focuses in. Health care saw the highest growth of sales at $2.2 billion, up 25.5% year over year. In contrast, the company's transportation and electronics division saw sales decrease 7.4% year over year to $2.3 billion.
The report highlighted operating cash flow at $2.5 billion and free cash flow at $2.2 billion, both of which were up 23% and 13% year over year.
Due to the ongoing pandemic, the company is uncertain of how long a full recovery will take and plans to continue to release monthly sales reports to maintain transparency. The report did mention that the company expects October sales to sit at flat to up to low single-digit numbers year over year.
As of Oct. 27, shares were trading at $163.24 with a market cap of $94.13 billion. The GF Value Line shows that the stock is currently trading at a modestly undervalued level.
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Disclosure: Author owns no stocks mentioned.
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