MMM 3M Company

By Andrew Tangel 

3M Co., the St. Paul, Minn.-based maker of consumer and industrial products, is scheduled to report fourth-quarter earnings before the stock market opens on Tuesday. Here's what you need to know:

EARNINGS FORECAST: Wall Street analysts' consensus estimate for fourth-quarter earnings per share is $1.87, up from the $1.66 prior year, according to Thomson Reuters. In October, 3M said it expects to earn between $8.15 and $8.20 a share for 2016, up from $7.58 a share for 2015. Analysts are expecting the company to earn $8.16 a share for the year.

REVENUE FORECAST: Analysts expect sales of $7.3 billion for the quarter, essentially flat from the prior year. For all of 2016, analysts are forecasting revenue of $30.1 billion, down slightly from $30.3 billion in 2015. The company in October said it expects full-year organic sales will be approximately flat compared to the previous year.

WHAT TO WATCH:

DOLLAR: 3M signaled in December that growing revenue in 2017 would be difficult given the strengthening of the U.S. dollar. The U.S. currency gained in the wake of Donald Trump's election as president and the U.S. Federal Reserve's decision to raise interest rates. A strong dollar makes it harder for exporters like 3M to sell products overseas as they become more expensive. Foreign sales also become less valuable when they are translated into U.S. currency. 3M has said it expects local-currency organic sales to increase between 1% and 3% in 2017, but a currency-translation headwind could drag down revenue by as much as 2%.

ELECTRONICS: A focus for analysts is likely to be 3M's struggling electronics and energy business, which makes components for everything from smart-phone screens to wind and solar power generation. Third-quarter sales for the unit declined 7.5% to $1.3 billion, while operating income of $312 million was down 9.1% from the previous year as the company cited difficulties in the consumer-electronics market. 3M expects organic sales in the segment to decline as much as 3% or grow as much as 1% in 2017. Still, the segment had a third-quarter operating margin of 24.2%, and Chairman and Chief Executive Inge Thulin said in December the business was "much more profitable than it was four, five years ago."

TRUMP EFFECT: 3M's stock is up about 4% since Mr. Trump's election, while the Dow Jones industrial average has risen about 8%. In December, 3M signaled it stood to benefit from Mr. Trump's plans to boost spending on infrastructure and rejuvenate U.S. manufacturing. 3M's myriad products include coatings for rebar used in construction as well as personal protective gear for factory workers. "When people think about who will benefit short-term there, we will be ahead of that, because we are the suppliers to those businesses," Mr. Thulin said in December, without commenting on Mr. Trump or his policy plans specifically.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

January 23, 2017 14:52 ET (19:52 GMT)

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