3M Stock Jumps On Earnings, Dividend, And Spending Plans
3M Company announced its 2014 sales and earnings outlook Tuesday and increased its dividend by 35 percent for the upcoming first quarter.
The Maplewood-based manufacturing giant said it expects next year’s earnings to be between $7.30 and $7.55 per share, which would be an increase from $6.32 in 2012. Analysts polled by Thomson Reuters expect earnings of $7.40 per share. 3M also said it expects sales growth between 3 and 6 percent for 2014.
The dividend increase to $0.86 per share from around $0.64 marks the 56th consecutive year the company has increased its annual dividends. As of November 29, 3M said it had 665 million common shares outstanding and about 92,000 shareholders of record. The dividend will be paid to shareholders on March 12 for those that purchased stock before the close of business on February 14.
Shares of 3M’s stock were trading up about 2.7 percent at $131.2 during Tuesday morning trading. Early in the day the stock was up 3.1 percent, which Bloomberg pointed out was the highest gain 3M's stock had seen in 16 months.
In its announcement, 3M laid out a five-year plan that included a 9 to 11 percent growth in earnings per share and a 4 to 6 percent growth in revenue. The company also said it expects to spend between $5 billion and $10 billion on acquisitions through 2017. Its acquisition investments could even exceed $10 billion it said, given the “right strategic opportunity, with multibillion-dollar transactions possible.”
“The strength and diversity of our business model supports more aggressive capital deployment and reflects our confidence in 3M’s future,” President and CEO Inge Thulin said in a statement. “We are building the company for long-term success and are committed to creating sustainable value for our shareholders.”
3M also said it expects to spend between $17 billion and $22 billion on share repurchases throughout the next five years, which is much higher than the $7.5 billion to $15 billion it previously expected to spend on repurchases.
Meanwhile, 3M was also featured in Popular Science recently for its enhanced combat helmets, which the magazine named one of the “100 Best Innovations of 2013.” According to 3M, the helmets provide “unparalleled ballistic and fragmentation protection” over standard-issue helmets. In September, the company announced that it would be supplying 77,000 of the helmets to the U.S. Marine Corps.
3M is among Minnesota’s five largest public companies based on its revenue, which totaled $29.9 billion in 2012.