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Mar 31, 2024
3M Q1 2024 Earnings Report
Reported strong first quarter results driven by operational performance and the completion of Solventum spin-off.
Key Takeaways
3M delivered better-than-expected results in Q1 2024, returning to organic growth and achieving double-digit adjusted earnings growth. The company completed the spin-off of Solventum and finalized major legal settlements, positioning it for long-term shareholder value creation.
Sales of $8.0 billion, down 0.3% year-over-year; adjusted sales of $7.7 billion with organic growth up approximately 1% year-over-year.
GAAP earnings per share of $1.67, down 5% year-over-year; adjusted earnings of $2.39, up double digits year-over-year.
Successfully completed the spin of Solventum on April 1st.
Initiated full-year 2024 guidance reflecting completion of Solventum spin.
Forward Guidance
3M initiated full-year 2024 expectations, reflecting Solventum as a discontinued operation. Adjusted total sales growth is expected to be between -0.25% and +1.75%, with adjusted organic sales growth flat to +2%. Adjusted earnings per share are projected to be between $6.80 and $7.30.
Positive Outlook
- Adjusted total sales growth between -0.25% and +1.75%
- Adjusted organic sales growth flat to +2%
- Adjusted earnings per share between $6.80 and $7.30
- Dividend payout ratio is expected to be approximately 40% of adjusted free cash flow
- Second-quarter dividend is expected to be declared in May 2024
Challenges Ahead
- Cannot forecast certain items required to develop meaningful comparable GAAP financial measures without unreasonable effort.
- Limitations in predictability of timing, ultimate outcome and numerous conditions outside of 3M’s control
- Does not include the impact of potentially-divested or acquired businesses on expected operations in forecasted outlook guidance it provides until close of a transaction.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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