Shares of 3M Co. went through a record high on Friday after the company that makes Post-it Notes, Scotch tape, and Command strips beat earnings estimates for the second quarter and raised its forecasts for the whole year.
“We had another great quarter with adjusted earnings growth in the double digits and strong cash generation,” said Bill Brown, the new CEO. “I want to thank the people who work at 3M for doing a great job, which we expect to continue in the second half of the year.”
The price of MMM 22.99% stock went up 23% to the highest level in two years. From what FactSet has known since January 1972, that was its biggest one-day gain ever.
The stock’s gain of $23.77 added about 156 points to the Dow Jones Industrial Average DJIA 1.64%, which went up 654 points, or 1.6%, on Friday.
The 122-year-old company is starting over in a way with this quarter. Its “forever chemicals” in drinking water and Combat Arms earplugs lawsuits, which had been a drag for years, are now over. So is the sale of its healthcare business as Solventum Corp. SOLV 0.14%.
During the quarter, Bill Brown took over as CEO of 3M from Mike Roman, who had been in the job for six years.
Brown told analysts on the call after the earnings report that the company has also made some changes to its structure in order to improve results. These include “shifting from a geographic to a global business-unit structure” and putting all of its supply-chain operations in one place.
A transcript from FactSet shows that Brown also said the company is looking at ways to spend more on research and development to “reinvigorate” the development of new products. The company is also continuing to invest in markets with higher growth rates, such as semiconductors, data centers, and electric cars.
The same time last year, 3M lost $6.84 billion, or $12.35 a share. This year, they made $1.15 billion, or $2.07 a share.
If you take out one-time costs like settlements and other legal costs, adjusted earnings per share went up from $1.39 to $1.93, which was higher than the $1.68 that FactSet predicted.
Total sales went down 0.4% to $6.26 billion, which was more than the $5.85 billion that FactSet thought they would be.
3M’s business units saw their sales drop: industrial and safety sales went down 0.2% to $2.76 billion; transportation and electronics sales went down 2.2% to $2.14 billion; and consumer sales went down 2.3% to $1.26 billion.
It was up from $800 million in the first quarter to $1.2 billion for the quarter, but down from $1.5 billion a year ago.
Next, the company raised its adjusted EPS guidance from $6.80 to $7.30 to $7.00 to $7.30. It also kept its adjusted total sales growth forecast at a range of down 0.25% to up 1.75%.
So far this year, 3M stock has gone up 38%, while the Dow has gone up almost 8%.
