Sales for the medical supply company 3M rose during the third quarter aided by pandemic driven demand.
The Minnesota based company announced that its sales grew 4.5 percent to $8.35 billion for the third quarter. The company beat expected sales projections, which estimated sales of $8.2 billion to $8.3 billion. Some analysts had expected a much lower $8.31 billion.
3M said sales from its safety and industrial division rose 6.9 percent up to $3 billion in a year-over-year comparison. These numbers topped a FactSet estimate of $2.93 billion.
According to the company, drivers for the growth included sales in personal safety, roofing granules, and automotive aftermarket.
In a further breakdown of 3M’s sales, health care supply sales pulled the most weight with a sales surge of 25.5 percent during the quarter. The growth equaled $2.2 billion, driven primarily by gains in medical solutions, separation and purification, and oral-care equipment. According to FactSet, analysts expected health-care sales to total $1.36 billion.
The considerable growth in health supplies helped offset a 7.1 percent decline in transportation and electronics. The transportation section dipped to $2.3 billion due to lower demand for automotive and aerospace products.
Additionally, safety and industrial sales rose 6.9 percent to $3 billion. Meanwhile, consumer sales were 5.6 percent higher. These products, which include pandemic-popular home improvement items, came in at $1.4 billion as consumers continued to concentrate their activities at home during the pandemic.
The sales in both the safety and industrial sector and the consumer sector saw enough growth in America to offset the diminished sales in Asia Pacific.
“Our third-quarter performance demonstrated once again the strength of the 3M model as we executed well, served customers and continued to fight the pandemic. 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,” said CEO Mike Roman in a statement.
The company posted $1.41 billion in profit, or $2.43 a share. Compared to last year, 3M posted $1.58 billion in profit, or $2.72 a share, during the same period.
The marginal decline in profits can be attributed to the growing expense the company has faced during the pandemic. Operating expenses for the company grew to $6.44 billion from last year’s $5.98 billion.
Operating cash flow for the company is up in comparison to last year. This quarter’s cash flow is $2.5 billion, which is up 23 percent since the same period the previous year. The company’s adjusted free cash flow is $2.2 billion, which is up 13 percent year-on-year.
The company also managed to reduce its overall debt. 3M’s total debt was reduced by $1.2 billion, down six percent from last year, and net debt was down by $1.3 billion, or eight percent, sequentially.
Despite its successes, 3M is not guiding its investors because of the pandemic’s unpredictability.
“Due to the continued evolving and uncertain impact of the COVID-19 pandemic, 3M is not able to estimate the full duration, magnitude and pace of recovery across its diverse end markets with reasonable accuracy. Therefore, 3M continues to believe it is prudent to not provide guidance. 3M will maintain its monthly reporting of sales information during the fourth quarter to continue to provide transparency on its ongoing business performance,” said the company in a statement.