The earnings for the third quarter of 2024 will be released by 3M (NYSE MMM), a diversified industrial company known as a leader in adhesives, personal protective gear, and other products. This is scheduled to take place on October 22 before the opening of the stock market.
Analysts predict that investors will be anticipating a difficult quarter, as earnings and revenues are expected to decrease year-over-year. Investors should know the following before the release of this report.
Expectations for 3M Earnings
Analysts project 3M earnings per share at $1.90. This represents a substantial drop of 28% from the same period last year.
The revenue for the year is estimated to be $6.06 Billion, a decline of 24.5%.
The company has seen a decline in revenue due to its recent spinoff of 3M Health Care, scheduled for April 2024. This had a negative impact on the performance year over year.
Despite the drop in EPS, there is a slight increase of 0.5% over the last 60 days.
Analysts have been more cautious in recent weeks, revising their forecasts downward.
3M’s competitors have reported their earnings for Q3 already
Some of 3M’s competitors have reported their third quarter earnings.
Snap-on, for example, reported flat revenue year-on-year but beat estimates by 7.8%. Worthington, on the other hand, showed a revenue drop of 17.5%, falling short by 13.1%.
The mixed results of 3M’s competitors suggests it could also face challenges.
Investors have been positive about the performance of the Industrial Machinery sector, as stocks rose an average 3.3% in the last month.
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3M stock, however, has been relatively stable during this time, trading currently at $135.09 with a price-target average of $137.50.
Stock 3M: What’s Next?
3M stock, despite the decline expected in Q3’s results, has seen a spectacular rally since 2024. It is now one of S&P 500’s top performers.
The stock soared over 105% after hitting its low point in 2023. It peaked at $140.70 earlier this year.
This rally, however, has been stalled over the past few weeks due to investors’ anticipation of the next earnings report.
Although a decline in earnings over the past year is expected, there still exists hope that a positive earnings surprise could influence the stock.
3M’s history shows that it has exceeded earnings expectations. This could increase investor confidence, and boost the stock price on the short-term.
Watch out for 3M Q3 Earnings
Investors are advised to pay attention to the management’s comments during the call. This is especially important in relation the strategy of the company for navigating the current challenges.
3M will need to be able to stabilize and maintain its liquidity, given the significant dependence on debt (a debt-to equity ratio of 3.38) and recent revenue decline.
Price-to-earnings ratio (P/E), which is 79.36 suggests that the market expects high growth in future.
The Q3 report on earnings will be important for 3M’s stock direction, as it faces challenges, including the slowdown of industrial demand and its spinoff from Health Care.
Investors should remain cautious and carefully monitor 3M’s performance during this forthcoming release.
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