Profits for the healthcare business at 3M Cos. (NYSE:MMM) were flat during the fourth quarter but up for the year, as the industrial conglomerate topped the consensus forecast today on a soaring bottom line.
St. Paul, Minn.-based 3M said its healthcare division put up operating income of $458.0 million on sales of $1.52 billion for the three months ended Dec. 31, 2018, down -0.4% and up 2.4%, respectively, compared with Q4 2017. Full-year operating income rose 2.0% to $1.80 billion on sales growth of 2.9% to $6.02 billion, compared with the prior year.
The company cited increased food safety, HIT system, medical solutions and oral care sales, offset by declines for its drug-delivery business.
3M’s overall Q4 profits rocketed 157.6% to $1.35 billion, or $2.27 per share despite flat sales of $7.95 billion, down -0.6% compared with the same period in 2017. Adjusted to exclude one-time items – including a $1.25-per-share charge on last year’s Tax Cuts & Jobs Act – earnings per share were $2.31, 3¢ ahead of Wall Street, where analysts were looking for sales of $7.87 billion.
Full-year profits rose 10.1% to $5.35 billion, or $9.09 per share, on sales growth of 3.5% to $32.77 billion. Adjusted EPS were $10.46, more than a half-dollar ahead of the consensus $9.95 view on The Street, where analysts were looking for sales of $32.72 billion.
“3M executed well in the fourth quarter, with results that were in line with our expectations,” CEO Mike Roman said in prepared remarks. “We delivered organic growth of 3% – which included growth across all business groups and geographic areas – along with strong cash flow and earnings. The fourth quarter capped an important year for 3M, as we posted good results and continued to take actions to strengthen our company for the future.
“Going forward, our team remains focused on executing our four priorities – portfolio, transformation, innovation and people & culture – which are keys to growth and value creation,” Roman added. “We are positioned for a successful 2019 and are focused on delivering for our customers and shareholders.”
3M cut its 2019 earnings outlook based on “the current external environment” and a 10¢-per-share hit from its M*Modal buyout, saying it now expects EPS of $10.45 to $10.90, down from $10.60 to $11.05 previously. Full-year sales growth, on an organic, constant-currency basis, is pegged at 1% to 4%, compared with 2% to 4% previously.
MMM shares were up 3.1% to $199.25 apiece today in mid-morning trading.
