Earnings and Earnings Growth
1. Earnings = sales x profit margin
- 2010 – $26.662 billion x 15.32% = $4.085 billion
- 2011 – $29.611 billion x 14.46% = $4.283 billion
3M’s earnings increased from $4.085 billion in 2010 to $4.283 billion in 2011 or by 4.84%.
2. Earnings per share = net income / shares outstanding
- 2010 – $4.085 billion / 725.50 million = $5.63
- 2011 – $4.283 billion / 719.00 million = $5.96
3M Company’s earnings per share increased from $5.63 in 2010 to $5.96 in 2011. This is an increase of 5.86%.
3. Five-year historical look at earnings growth
- 2007 – $4.096 billion, 6.36% increase over 2006
- 2008 – $3.460 billion, 18.38% decrease
- 2009 – $3.193 billion, 8.36% decrease
- 2010 – $4.085 billion, 27.93% increase
- 2011 – $4.283 billion, 4.85% increase
In analyzing the earnings growth of 3M company over the past five years, you can see 3M has had a range of $3.193 billion in 2009 to $4.283 billion in 2011. The earnings have been increasing looking back to 2004 and over the past five years, the company has averaged earnings growth of 12.4%. Despite a year of significant natural disasters (Japan earthquake and Thailand flooding) and economic uncertainty in Europe, 3M company posted an earnings increase of 4.85% over 2010.
To read more: 3M profitability analysis
or read: 3M Company: Inside The Numbers
Facebook
Twitter
