3M · Q2 2023 earnings

Briefing

Reported strong quarterly financial results driven by proactive initiatives and raised full-year adjusted EPS guidance.

3M reported Q2 2023 results with sales of $8.3 billion, down 4.3 percent year-on-year, and an organic sales decline of 2.2 percent. GAAP loss per share was $12.35, including a $14.19 negative impact from the PWS settlement. Adjusted EPS was $2.17. The company raised its full-year adjusted EPS expectations for 2023 to $8.60 to $9.10.

• GAAP loss per share of $12.35 and operating margin of minus 107.6% include the previously announced proposed settlement agreement with PWS in the United States regarding PFAS resulting in a pre-tax charge of $10.3 billion payable over 13 years, negatively impacting earnings per share by $14.19.
• Adjusted earnings per share of $2.17 includes pre-tax restructuring charges of $212 million, or negative $0.31 per share.
• Adjusted operating income margin of 19.3% includes a 2.7 percentage point headwind from pre-tax restructuring charges.
• Operating cash flow of $1.5 billion, up 34 percent year-on-year; adjusted free cash flow of $1.5 billion, up 44 percent year-on-year.

Headline financials

Revenue & EPS history

3M raises its full-year adjusted EPS2 expectations for 2023 to $8.60 to $9.10 vs. $8.50 to $9.00 prior. Adjusted total sales growth2 in the range of -5 to -1 percent, reflecting adjusted organic sales growth of -3 percent to flat, which remains unchanged. Adjusted operating cash flow2 of $5.9 to $6.3 billion is contributing to 90% to 100% adjusted free cash flow conversion2,which is also unchanged.