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$MMM agreed to buy Scott Safety from $JCI. On GAAP basis, $MMM expects the acquisition to be $0.10 dilutive to earnings in the first 12 months following completion of the transaction. Excluding items, $MMM expects the acquisition to be $0.10 accretive to earnings over the same period. The deal will close in 2H17.
During 4Q17, in the Industrial business group, $MMM posted organic growth of 3.9%. Safety & Graphic sales grew 10.7% organically with double digit increases across developed and developing markets. Healthcare grew 3.1% organically and Electronics & Energy organic sales growth was 11%. In Consumer, organic growth was 5.4% in 4Q17.
Following the passage of the new tax legislation, $MMM recorded a net tax expense in 4Q17 of $762MM or $1.25 per share resulting in GAAP EPS of $0.85. This net tax expense includes the onetime transition tax on unremitted foreign earnings, as well as true-ups of tax deferred assets and liabilities. Excluding this impact, 4Q17 EPS was $2.10.
$MMM reported a 54% decrease in 4Q17 earnings. Net income was $523MM or $0.85 per share compared to $1.15Bil or $1.88 per share in 4Q16. The Tax Cuts and Jobs Act resulted in a net tax expense in the quarter of $762MM or $1.25 per share. Sales rose 9% to $8Bil from last year.
$MMM entered into agreements related to the sale of substantially all of its Communication Markets Division to Corning Incorporated, for $900MM. The sale is expected to be completed in 2018. $MMM expects to realize a gain of about $0.40 per share from this transaction, net of actions related to the divestiture.
$JCI, which completed the sale of Scott Safety business to $MMM in Oct. 2017, reported 4Q17 net income of $875MM compared to a loss of $1.17Bil a year ago. GAAP EPS was $0.93 versus a loss of $1.61 per share. Sales of $8.1Bil increased 4% on a combined basis. On an adjusted basis, Johnson Controls earned $0.87 per share.
$MMM said the divestiture of the electronic monitoring business is expected to have a net positive impact of $0.12 to earnings in 4Q17. Meanwhile the Scott Safety income, net of acquisition and integration costs, is expected to reduce EPS by $0.08 during this period.
$MMM raised its guidance for FY17. The industrial giant now sees organic local-currency sales growth of 4-5%, higher than the previous guidance of 3-5%. 3M anticipates EPS of $9.00-9.10 per share during this period – up 10-12% YoY – vs the prior outlook of $8.80-9.05.
Sending shares up over 5%, $MMM reported a 6% increase in its 3Q17 sales to $8.2Bil. The sales hike was led by 13% gains in its Electronics and Energy segment, as well as a 6% sales growth in its largest unit, Industrial. Net income grew to $1.43Bil, or $2.33 per share, compared to $1.33Bil, or $2.15 per share in the same quarter last year.
$MMM announced the early tender results of its previously announced tender offers to purchase for cash up to $400MM aggregate principal amount of its 5.70% notes due 2037 and 6.375% debentures due 2028. The company said it has exercised its option to have an early settlement date on Oct. 6, 2017
$MMM has completed the sale of its electronic monitoring business to funds advised by Apax Partners, a global private equity advisory firm, for approx $200MM, net of cash sold and closing adjustments. 3M will record about $0.12 per share benefit in 4Q17 from this divestiture.