Al Root
3M earnings are due Tuesday morning. Investors want to see solid earnings results. They also want to understand risks arising from President Donald Trump's escalating trade war.
As for first-quarter results, Wall Street is looking for earnings per share of $1.77 from sales of $5.8 billion, according to FactSet. A year ago, 3M reported EPS of $2.39 and sales of $7.7 billion. Comparability is an issue. 3M completed the spinoff of its healthcare unit Solventum on April 1. That business was still part of 3M at the end of March 2024.
Investors would like an "earnings beat." An update to guidance will matter, too. In January, 3M said 2025 sales should grow by about 2.5%. Sales growth hasn't been easy for the company lately. In the first quarter of 2024, organic sales grew by about 1%, the first positive reading in four quarters. Fourth-quarter sales grew 2.1% year over year on a comparable basis.
For full-year earnings for 2025, 3M expected a range of $7.60 to $7.90 a share. The $7.75 midpoint was very close to the $7.78 consensus number by FactSet.
Beyond the numbers, investors will want some insight about tariffs and trade wars. In 2024, 3M generated about 45% of its sales outside of the Americas with almost 30% in the Asia-Pacific region.
"As a top U.S. exporter -- about $4 billion [annually] -- we think retaliatory tariffs are an underappreciated source of risk for 3M," wrote Morgan Stanley analyst Christopher Snyder in a preview report. He rates shares Sell and has a $130 price target for the stock.
Management can address trade issues on a conference call beginning at 9 a.m. Eastern time.
Coming into Tuesday trading, 3M stock was roughly flat since the Nov. 5 presidential election, while the S&P 500 and Dow Jones Industrial Average fell 11% and 10%, respectively.
Options markets imply the stock will move about 6%, up or down, following earnings. Shares have moved about 9% following the prior four earnings reports, rising three times and falling once over that span.
Write to Al Root at allen.root@dowjones.com
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April 21, 2025 17:03 ET (21:03 GMT)
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