3M (MMM) Sales Rise Y/Y in July, Quarterly Dividend Approved
3M Company MMM yesterday provided an update on its sales performance in July 2020. The top line increased 6% on a year-over-year basis on strengthening demand in various geographies served and businesses. Notably, the company recorded a 12.2% year-over-year decline in sales for second-quarter 2020.
In addition to the sales update, 3M announced to have received the board of directors’ approval for the payment of the quarterly dividend for the third quarter of 2020.
The company’s shares gained 1% yesterday, closing the trading session at $165.86.
Details on Monthly Sales Update
The monthly sales totaled $2.8 billion. Organic sales in July were up 3% year over year and acquisitions/divestitures had a positive impact of 3%. Forex impact was neutral in July.
On a geographical basis, sales in the Americas increased 10% year over year or 6% on an organic (local currency) basis. Notably, local-currency organic sales grew 8% in the United States. Further, Europe, Middle East and Africa’s sales expanded 3% year over year or were flat organically.
Sales in the Asia Pacific were flat compared with the year-ago month or decreased 1% organically. Notably, organic sales (local currency) in China increased 13%, while fell 12% in Japan.
On a segmental basis, sales increased 6% year over year in Safety and Industrial, 9% in Consumer and 29% in Health Care. However, sales in Transportation and Electronics decreased 7% year over year. On an organic local-currency basis, sales were up 8% in Safety and Industrial, 9% in Consumer and 11% in Health Care, while decreased 6% in Transportation and Electronics.
As noted earlier, 3M expects a sequential improvement in the global economy in the third quarter of 2020. It believes that the pandemic-induced demand for respirators is anticipated to increase organic sales by 300-350 basis points in the quarter.
For the third quarter of 2020, the Zacks Consensus Estimate for revenues is pegged at $8 billion, suggesting a decline of 0.02% from the year-ago reported figure. The consensus estimate for earnings is pegged at $2.15, reflecting an increase of 4.9% from the 30-day-ago figure.
Dividend
3M will pay the quarterly cash dividend of $1.47 per share to shareholders of record as of Aug 24. The disbursement will be made on Sep 12, 2020.
It is worth noting here that 3M continues to use its capital for dividend payments and organic investments despite the pandemic-related prevailing difficulties. However, it suspended its share-buyback activities temporarily.
During the first half of 2020, the company paid out dividends totaling $1,693 million to its shareholders, reflecting an increase from $1,660 million in the year-ago comparable period. In February 2020, the quarterly dividend was hiked by 2% or 3 cents per share. Also, share buyback in the first half of 2020 was worth $366 million, with the entire buyback done in the first quarter.
Zacks Rank, Earnings Estimates, Price Performance and Peers
3M, with a market capitalization of $94.6 billion, currently carries a Zacks Rank #3 (Hold). The company is poised to gain from its cost-saving measures, the pandemic-induced demand for certain products, buyouts and shareholder-friendly policies. However, weakness in end-markets caused by the coronavirus outbreak, high debts and forex woes are concerning.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past three months, 3M’s shares have gained 19.6% compared with the industry’s growth of 23.5%.
In the past 30 days, the Zacks Consensus Estimate for the company’s earnings is pegged at $8.23 for 2020 and $8.94 for 2021, reflecting growth of 4% and 2.5% from the respective 30-day-ago figures.
3M Company Price and Consensus
3M Company price-consensus-chart | 3M Company Quote
Three companies from the industry that competes with 3M are Carlisle Companies Incorporated CSL, Honeywell International Inc. HON and Danaher Corporation DHR.
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