3M (MMM) Slated To Report Q4 Earnings: What's In The Offing?

3M Company (NYSE:MMM) is scheduled to release fourth-quarter 2019 results on Jan 28, before the market opens.

The company delivered better-than-expected results in three of the last four quarters, while lagged estimates once. Positive earnings surprise was 0.81%, on average. In the last reported quarter, its earnings of $2.58 per share surpassed the Zacks Consensus Estimate of $2.47.

In the past three months, 3M’s shares have gained 7% compared with the industry’s growth of 11.8%.

Let us delve deeper.

Key Factors to Note

Solid product offerings, focus on innovation, acquired assets, effective pricing and share-buyback activities are expected to have aided the company’s performance in the fourth quarter of 2019. Also, restructuring and other actions to cut costs, increase cash flow generation and boost productivity might have been beneficial.

In third-quarter 2019, organic sales were adversely impacted by soft China operations as well as weakness in electronics and automotive end markets. The same trend might have continued in the fourth quarter and adversely impacted revenues.

Additionally, unfavorable movements in foreign currencies, and costs associated with restructuring and other actions might have played spoilsports.

3M expects organic sales in the fourth quarter to decline 1-3% year over year. Forex woes will likely have an adverse impact of 1% on sales, while acquisitions (net of divestiture impact) will likely boost revenues by 5%. Earnings in the quarter are predicted to be $2.05-$2.15 per share, including an adverse impact of 15 cents per share from the Acelity buyout.

The Zack Consensus Estimate for 3M’s earnings per share for the fourth quarter is pegged at $2.10, suggesting year-over-year and sequential declines of 9.1% and 18.6%, respectively. The consensus estimate for revenues of $8,126 million indicates 2.3% year-over-year growth and 1.7% sequential increase.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for 3M this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: 3M has an Earnings ESP of -0.86% as the Most Accurate Estimate of $2.08 is below the Zacks Consensus Estimate of $2.10.

3M Company Price, Consensus and EPS Surprise