3M Company changed hands 0.34 percent higher in the trading session after beating the EPS estimates from its second quarter earnings report.
The Maplewood, Minnesota based company reported an earnings per share of $2.08, higher than the $2.02 EPS in the same period last year. 3M surpassed the estimated $2.07 EPS of the Wall Street. The company also posted a revenue of $7.66 billion, lower than the expected $7.71 billion and the $7.68 revenue in the second quarter of 2015.
For the second quarter, 3M has an operating income of $1.9 billion and a net income of $1.3 billion. 3M repurchased $828 million of its own share while its organic local-currency sales growth rallied in all locations except from the Asia Pacific region in the second period of the year.
Moreover, the company had an operating cash flow of $1.3 billion and paid out $672 million in cash dividends to its shareholders.
3M forecasted an earnings per share between $8.15 to $8.30 for 2016 far from its previous estimate of eps ranging $8.10 to $8.45. However, market experts forecasted $8.22 earnings per share of 3M for the rest of the year.
Inge G. Thulin, 3M Company’s Chairman, President and CEO stated that their execution of the 3M playbook is enabling them to deliver premium returns while also building for the future, which includes making good progress on business transformation and investing approximately 10 percent of their sales into R&D and capital expenditures in the quarter.
3M Electronic and Energy Sector
Recognizing the poor performance of the electronic sector, Mr. Thulin confirmed that it was not a surprise for them and he hoped that they don’t need to take drastic action in those (referring to the electronic markets).
During the first quarter, the sales of the energy and electric sector lost 14 percent as the operating income was down 27 percent. The slump extended during the second quarter as the local currency sales declined 9.1 percent in the electronics and energy unit, with the low demand in Asia-Pacific Region .
Surprisingly, the company gained in the Middle East, Africa and region as the telecom business of 3M posted growth. The Minnesota based firm is divided into five segments: Industrial, Safety and Graphics, Helath Care, Electronics and Energy and Consumer and has been known for its foil, vinyl and polyester products.
3M Stock Performance
Although the company was struggling on its electronic sales, investors still closely watch on the performance of the stock in the market. Recently, 3M remained moderately high as it advance 0.34 percent to $178.27 with a market capitalization of $106.84 billion.
The stock has a price earnings ratio of 22.72 and a dividend yield of 2.49 percent. 3M has a 50-day moving average price of $172.40 and a 200-day moving average price of $159.46. Its 12-month high stands at $182.27 while its 12-month low id $134.00.
Mr. Thulin remained optimistic as four of its five business sectors performed in-line with their expectations for the entire year. "Each of our businesses is facing slightly different market realities. Yet all of them are executing very well."
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