uploads/2018/07/3M-Q2-2018-Revenue-1.png

3M Reports Record Second-Quarter Revenue

By

Updated

3M’s Q2 2018 revenues

3M (MMM) reported revenues of $8.39 billion in Q2 2018, an increase of 7.4% on a year-over-year basis. In 2Q 2017, 3M reported revenue of $7.81 billion. 3M revenues managed to beat the Wall Street analysts’ estimate of $8.37 billion. 3M’s revenue has grown at a compound annual growth rate (or CAGR) of 1.6% for the second quarter since 2013.

3M’s revenue growth was primarily due to organic growth of 5.6% over the corresponding quarter of the previous year. During the quarter, MMM completed the sale of the Communications Market division. As a result, the acquisition revenue net of divestitures increased by 0.8% and finally, the favorable foreign currency helped MMM revenue to grow by 1.0%.

Article continues below advertisement

Geographically, EMEA (Europe, the Middle East, and Africa) led the pack with growth of 9.5%, followed by 7.9% in Asia-Pacific, 7.1% in the United States, and 3.1% in Latin America/Canada. 3M’s revenue grew across all of its revenue segments led by Safety & Graphics with an increase of 15.8% followed by Industrial with 6.8% growth, Health Care with 4.9% growth, Consumer with 4.6% growth, and finally, Electronics and Energy with 3.3% growth. We’ll look into each of the reporting segments in later parts of this series.

Management comments

Mike Roman, 3M’s CEO, said, “3M had a strong quarter, including organic growth of 6 percent that was broad-based across all business groups and geographic areas. Our team delivered record sales and a double-digit increase in earnings per share, while keeping our commitment to investing in our business and returning cash to shareholders.”

Revenue outlook

3M projects revenue growth of 3% to 4%. Investors looking to hold 3M indirectly can invest in the Industrial Select Sector SPDR Fund (XLI), which has invested 5.0% of its portfolio in 3M. The fund’s other holdings include Boeing (BA), General Electric (GE), and Honeywell (HON) with weights of 8.6%, 5.0%, and 5.1%, respectively, as of July 24, 2018.

In the next part, we’ll look into 3M’s segment performance in Q2 2018.

Advertisement

More From Market Realist