MMM's Q1 Earnings Surpass Estimates, Revenues Decrease Y/Y

3M Company MMM reported first-quarter 2025 results, wherein revenues missed and earnings surpassed the Zacks Consensus Estimate.

It’s worth noting that in April 2024, the company completed the spin-off of its Healthcare business into a separate public company. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Inside MMM’s Headlines

3M delivered adjusted earnings of $1.88 per share, which surpassed the Zacks Consensus Estimate of $1.77. The company reported earnings of $1.71 per share in the year-ago quarter.

The company reported net revenues of $5.95 billion in the quarter. The metric decreased 1% year over year. Organic sales decreased 0.3%. Foreign currency translation had a negative impact of 1.7% while acquisitions/divestitures boosted the top line by 1%.

MMM’s adjusted revenues of $5.78 billion missed the consensus estimate of $5.79 billion. On an adjusted basis, revenues increased 0.8% year over year. 

Region-wise, organic sales in the Americas inched up 1.7% year over year while Asia Pacific organic sales decreased 0.7%. Organic sales from businesses in Europe, the Middle East and Africa decreased 5.1%.

3M’s Segmental Results

Revenues from Safety and Industrial totaled $2.70 billion, up 0.5% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.74 billion. Organic revenues increased 2.5% and foreign currency translation had a negative impact of 2%.

Revenues from Transportation & Electronics totaled $1.99 billion, reflecting a year-over-year decrease of 5.4%. The downside is attributable to a 4% decline in organic sales. The consensus estimate for the segment’s revenues was pegged at $1.83 billion. Foreign currency translation had a 1.4% negative impact on revenues.

Revenues from the Consumer segment decreased 1.4% year over year to $1.12 billion. The consensus estimate for the segment’s revenues was pegged at $1.15 billion. Organic sales increased 0.3%. Movements in foreign currencies had an adverse impact of 1.7%.

MMM’s Margin Profile

3M’s cost of sales decreased 0.2% year over year to $3.48 billion. Selling, general and administrative expenses decreased 16.2% to $945 million. Research, development and related expenses increased 12.2% year over year to $285 million.

In the first quarter, 3M reported an operating income of $1.25 billion, up 8.4% from the year-ago period.

MMM’s adjusted operating income increased 11% year over year to $1.36 billion. The adjusted operating margin was 23.5% compared with 21.3% in the year-ago quarter. The adjusted tax rate was 20.9%, in line with the year-ago period.

3M’s Balance Sheet and Cash Flow

Exiting the first quarter, 3M had cash and cash equivalents of $6.3 billion compared with $5.6 billion at the end of December 2024. Long-term debt was $12.3 billion at the end of the quarter compared with $11.1 billion at the end of December 2024.

3M used net cash of $79 million in operating activities against $767 million cash generated in the year-ago quarter. Capital used for purchasing property, plant and equipment decreased 37.1% to $236 million.

Adjusted free cash flow at the end of the quarter was $489 million. Adjusted free cash flow conversion was 48% at the end of the same period.

In the first three months of 2025, 3M rewarded its shareholders with $396 million in dividend payments.

MMM’s 2025 Guidance

For 2025, MMM expects adjusted earnings to be in the range of $7.60-$7.90 per share. The midpoint of the guided range is $7.75, which reflects an increase from earnings of $7.30 per share reported in 2024.

Adjusted organic revenues are expected to grow 2-3%.

3M’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

AZZ Inc. AZZ came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.95. This compares with earnings of $0.93 per share a year ago.

AZZ reported revenues of $351.88 million, missing the consensus estimate by 3.77%. This compares with year-ago revenues of $366.5 million. 

Valmont Industries VMI reported revenues of $969.31 million in the first quarter of 2025, declining 0.9% on a year-over-year basis. EPS of $4.32 for the same period compares with $4.32 a year ago.

The reported revenues compare with the Zacks Consensus Estimate of $975.6 million. The company delivered an EPS surprise of 1.89%, with the consensus estimate being $4.24.

Pentair plc PNR came out with quarterly earnings of $1.11 per share in the first quarter of 2025, beating the Zacks Consensus Estimate of $1.01. This compares with earnings of $0.94 per share a year ago.

Pentair posted revenues of $1.01 billion for the quarter, surpassing the consensus estimate by 2.68%. This compares with year-ago revenues of $1.02 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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