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3M (MMM) to Report Q4 Earnings: Is a Beat in the Cards?

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3M Company MMM is scheduled to release fourth-quarter 2021 results on Jan 25, before market open.

The company delivered better-than-expected results in the last four quarters, with the earnings surprise being 14.82%, on average. In the last reported quarter, its earnings of $2.45 per share surpassed the Zacks Consensus Estimate of $2.18.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

In the past three months, 3M’s shares have lost 4.7% compared with the industry’s decline of 5.1%.

Key Factors at Play

3M’s focus on investing in innovation, digital capabilities and growth opportunities in several fields, including electronics and software, home improvement and personal safety, are likely to have positively impacted its operations in the fourth quarter. Also, the company’s strong product offerings, coupled with its focus on operational execution and generating healthy free cash flow, are likely to have driven its performance in the quarter.

Coming to operating segments, 3M’s Safety & Industrial segment is expected to have gained from solid industrial manufacturing activities and strength across its automotive aftermarket, abrasives, electrical and adhesives & tapes end markets. Also, a healthy demand environment in its closure and masking systems business is likely to have been beneficial. However, headwinds across its personal safety business due to a slowdown in product demand might have affected its top-line performance. The Zacks Consensus Estimate for the Safety & Industrial segment’s revenues is currently pegged at $3,133 million, indicating a fall of 3.2% from the previous quarter’s reported number.

For the Transportation & Electronics segment, strength across the company’s advanced materials, commercial solutions and transportation safety businesses is likely to have boosted its revenues. However, supply-chain constraints, especially for semiconductor chips, are expected to have hurt its production volumes in the electronics and automotive OEM markets. Also, solid momentum across its food safety, oral care and health information systems businesses is likely to have positively impacted the Health Care segment in the fourth quarter. A slowdown in demand for disposable respirator is expected to have marred its performance. The consensus estimate for Transportation & Electronics segment’s fourth-quarter revenues is pegged at $2,247 million, suggesting an 8.3% decline from the third quarter’s reported figure while the same for the Health Care segment stands at $2,253 million, implying an improvement of 0.2%.

Strength in the home improvement market and rise in office and stationery demand might have acted as tailwinds for its Consumer segment. However, the impacts of the pandemic-related headwinds might have been a drag. The consensus mark for the Consumer segment’s revenues stands at $1,453 million, implying a 4.7% sequential decrease.

Inflation in raw material and logistics costs is likely to have hurt its margins and profitability in the quarter. Also, high restructuring and research, development and other related expenses might have hurt fourth-quarter performance.

The Zacks Consensus Estimate for 3M’s fourth-quarter revenues is pegged at $8,605 million, indicating a sequential decline of 3.8%. The consensus estimate for the company’s earnings is $2.03, suggesting a fall of 17.1% sequentially.

Earnings Whispers

Our proven model suggests 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. This is the case here, as elaborated below.

Earnings ESP: The company has an Earnings ESP of +0.21%.

3M Company Price and EPS Surprise

3M Company Price and EPS Surprise
3M Company Price and EPS Surprise

3M Company price-eps-surprise | 3M Company Quote

Zacks Rank: 3M carries a Zacks Rank #3.

Other Key Picks

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:

ITT Inc. ITT has an Earnings ESP of +0.54% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for ITT’s earnings is pegged at $1.05 per share for the fourth quarter of 2021. ITT’s shares have gained 1.2% in the past three months.

Dover Corporation DOV has an Earnings ESP of +0.33% and a Zacks Rank of 3, currently.

The Zacks Consensus Estimate for Dover’s earnings is pegged at $1.66 per share for the fourth quarter of 2021. DOV’s shares have gained 3% in the past three months.

Flowserve Corporation FLS has an Earnings ESP of +2.08% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for Flowserve’s earnings is pegged at 48 cents per share for the fourth quarter of 2021. FLS’ shares have lost 16.1% in the past three months.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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3M Company (MMM) : Free Stock Analysis Report

Dover Corporation (DOV) : Free Stock Analysis Report

Flowserve Corporation (FLS) : Free Stock Analysis Report

ITT Inc. (ITT) : Free Stock Analysis Report

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