3M reveals Q2 results and plans to spin off its healthcare business
- 3M Co reports better-than-expected sales for its fiscal second quarter.
- The industrial firm announces plans of spinning off its healthcare business.
- Shares of the multinational conglomerate are up roughly 5.0% on Tuesday.
Shares of 3M Co (NYSE: MMM) are in the green this morning after the industrial giant reported better-than-expected sales for its fiscal second quarter.
3M to spin off healthcare segment
Also on Tuesday, the American multinational conglomerate disclosed plans of spinning off its healthcare business. On CNBC’s “Squawk Box”, CEO Mike Roman said:
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The announcement results in two world-class companies, both positioned to grow and thrive. We’re looking to unlock value, [and] best way to create value is to spin our healthcare business. It’s ready to be a successful standalone company.
3M Q2 results
- Net income printed at $78 million versus the year-ago figure of $1.50 billion
- Per-share earnings of 14 cents were significantly below last year’s $2.59
- On an adjusted basis, EPS was down 10% to $2.48 in the recent quarter
- Sales fell nearly 3.0% to $8.70 billion, as per the earnings press release
- FactSet consensus was for $2.65 of adjusted EPS on $8.57 billion in sales
Foreign-exchange negatively affected sales by 4.0%. Another $1.2 billion pre-tax charge this quarter was related to the Combat Arms Earplugs settlement.
3M future guidance
3M now forecasts up to a 2.5% decline in sales this year. It also lowered guidance for adjusted per-share earnings to $10.30 – $10.80. Roman noted:
As we look at H2, we see strong demand across many of our end markets. Although, there’s some softening in certain key areas. We’ve updated guidance largely on strength of U.S. dollar and macro uncertainty impacting our organic growth.
3M has been using its pricing power to tackle supply constraints and inflation at large and the chief executive expects that to continue.