Torrid Tuesday Earnings Summary: Here Are The Top Quarterly Report Highlights

According to Bloomberg, initial enthusiasm over General Electric’s headline EPS beat quickly gave way to the sobering reality that big challenges remain in some of GE’s key markets, most notably aviation. And free cash flow in its industrial operations missed Wall Street’s expectations, sending shares lower Tuesday as shareholders digested the results. The shares are down 2.3%. Gordon Haskett analyst John Inch said the company’s reiteration of the components of its 2021 guidance was “a negative contrast” with other multi-industry companies that have reported thus far and raised their outlooks for the year.

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3M Co (MMM) Adj. EPS 2.77 (exp. 2.29), Revenue 8.9bln (exp. 8.47bln)

MMM stock tumbled even though the company reported net sales for the first quarter that beat the average analyst estimate.

  • First Quarter Results
    • Adjusted EPS $2.77 vs. $2.16 y/y, estimate $2.30 (range $2.20 to $2.49)
    • EPS $2.77 vs. $2.22 y/y, estimate $2.30 (range $2.20 to $2.49)
    • Net sales $8.85 billion, +9.6% y/y, estimate $8.47 billion (range $8.21 billion to $8.88 billion) (Bloomberg Consensus)
      • Safety & industrial net sales $3.33 billion, estimate $3.23 billion
      • Transportation & electronic net sales $2.53 billion, estimate $2.34 billion
      • Health care net sales $2.25 billion, estimate $2.15 billion
      • Consumer net sales $1.37 billion, estimate $1.34 billion
    • Operating margin 22.5% vs. 20.6% y/y, estimate 21.4%
    • Operating income $1.99 billion, estimate $1.82 billion (range $1.75 billion to $1.95 billion)
  • Year Forecast
    • Sees adjusted EPS $9.20 to $9.70, estimate $9.62 (range $9.35 to $9.91); Still sees sales +5% to +8%
  • Commentary and Context
    • Year 2021 Guidance Remains Unchanged
    • Company reduced total debt by $0.6 billion, or 3 percent, and net debt by $0.7 billion, or 5 percent, sequentially
    • In 1Q, 3M made payments of approximately $1m associated with divestiture- related restructuring actions
    • The company's operating cash flow was $1.7b with an adjusted free cash flow of $1.4b contributing to adjusted free cash flow conversion of 86%
    • Organic local-currency sales grew 12.8% in the Asia Pacific, 6.3% in the Americas, and 5.5% in EMEA
    • 3M also expects its full-year free cash flow conversion to be in the range of 95% to 105%
  • 3M said supply chain challenges continue, anticipating raw materials/logistics FY '21 headwind to EPS of between USD 0.30-0.50/share
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