3M Earnings Beat Estimates Due to Pandemic Demands

Health care products lead the charge for the company

Jan 26, 2021

Diversified production company 3M Co. (MMM, Financial) has released profitable earnings on the back of increased demand for health care products during the ongoing pandemic.

The company reported earnings per share of $2.38 for the fourth quarter, which beat estimates that placed earnings between $2.04 and $2.28 per share. Net sales totalled $8.58 billion for the quarter, representing a 5.8% increase.

3M saw success across all of its individual divisions, noting the success of its health care division. Health care benefitted specifically from the sale of protective masks, including the company's highly demanded N95 mask, throughout 2020. Sales for the health care division were up 5.4% at $2.3 billion for the quarter.

The company's safety and industrial division brought sales up 12.7% during the quarter to lead the charge. Consumer sales also saw a large increase of 10.6% to a total of $1.4 billion and transportation and electronics saw a small 2.3% increase to $2.3 billion.

Operating cash flow came out to $2.5 billion for the quarter and adjusted to $2.1 billion after deductions. 3M was also able to pay out $848 million in cash dividends to shareholders during the quarter while decreasing total debt by 4%.

3M is expecting to increase sales throughout 2021 in the range of 5% to 8%. They are also pushing for earnings per share of $9.20 to $9.70 and have laid plans for environmental, social and governance improvements throughout the following year.

On Jan. 26, the stock was trading at $176.26 per share with a market cap of $101.30 billion. According to the GF Value Line, the stock is trading at fair value.

Top gurus invested in 3M include Mario Gabelli (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Tweedy Browne (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio).

Disclosure: Author owns no stocks mentioned.

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