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3M Posts Earnings Beat on Surging Medical Equipment Sales

3M posted better-than-expected earnings and sales on surging sales of health care products and equipment and strong demand for consumer products.

3M Co. (MMM) - Get Report posted better-than-expected earnings and sales on Tuesday on surging sales of its health care products and equipment including respirators, as well as strong demand for consumer products like 3M stickies. 

The St. Paul, Mind.-based maker of respirators and other front-line equipment being used in the battle against Covid-19 posted net income of $1.41 billion, or $2.43 a share, vs. $1.59 billion, or $2.75 a share a year ago. Analysts polled by FactSet had been expecting per-share earnings of $2.26 a share.  

Sales rose 4.5% from last year to $8.35 billion vs. $7.99 billion a year ago, also above analysts' forecasts of $8.3 billion. Health care sales surged 25.5% during the quarter, 3M said, offsetting a 7.1% decline in transportation and electronics. Safety and industrial sales rose 6.9% while consumer sales were 5.6% higher.

Operating cash flow was $2.5 billion, Merck said, with adjusted free cash flow of $2.2 billion. The company said it paid out $847 million in cash dividends to shareholders during the third quarter and brought its total debt level by $1.2 billion, or 6%.

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On a geographic basis, total sales grew 7.7% percent year-on-year in the Americas, 4.4% in EMEA (Europe, Middle East, and Africa), but fell 0.6% in Asia Pacific. 

“Though economic uncertainty and challenges due to the Covid-19 pandemic remain, we returned to positive organic sales growth with sequential improvement across businesses and geographies," CEO Mike Roman said in a statement. "We posted another quarter of robust cash flow, aggressively managed costs and further strengthened our balance sheet."

3M did not provide full-year guidance, though did estimate total sales for October to be "flat to up low-single digits year-on-year," including the expected impact of one fewer business day in October 2020 versus October 2019.

Shares of 3M were down 3.05% at $161.14 in trading on Tuesday.