3M reveals Q2 results and plans to spin off its healthcare business

0

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:

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.

The tax-free transaction is scheduled to complete by the end of 2023. The stock is now down more than 20% for the year.

3M Q2 results

Net income printed at $78 million versus the year-ago figure of $1.50 billionPer-share earnings of 14 cents were significantly below last year’s $2.59On an adjusted basis, EPS was down 10% to $2.48 in the recent quarterSales fell nearly 3.0% to $8.70 billion, as per the earnings press releaseFactSet 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.

The post 3M reveals Q2 results and plans to spin off its healthcare business appeared first on Invezz.