3M Pares Full-Year View, Says 2017 to Remain Weak -- WSJ
October 26 2016 - 2:03AM
Dow Jones News
By Bob Tita
3M Co. trimmed sales and earnings outlooks for 2016 and sees
lackluster economic growth continuing into next year, curbing
demand across its broad portfolio of consumer and industrial
products.
"We cannot predict when a turnaround is coming in the economy,"
Chief Executive Inge Thulin said Tuesday. "When it comes, we are
ready to capitalize on that."
The maker of Post-it Notes, Scotch tape and Ace bandages said it
expects sales outside of acquisitions or currency gains to be flat
this year. 3M previously forecast sales rising 1% in 2016. The
company trimmed a dime off its profit per share forecast for the
year, to $8.15 to $8.20.
Mr. Thulin said demand for many 3M products "tempered" in the
third quarter, particularly in the U.S. and key developing markets
such as Brazil and Turkey,
The St. Paul, Minn.-company continued to counter sluggish sales
growth with stellar profit margins. 3M's overall operating margin
for the quarter rose slightly from last year to 24.7%. Three of the
company's five business units reported higher operating
margins.
In 3M's weakest unit, electronics and energy, operating margin
slipped just slightly from last year to 24.2%, despite a 9% drop in
income and a 7.5% drop in sales. The business supplies components
for cellphones, computers and other consumer electronics.
Electronics-related sales slipped 8% during the quarter, the
company said. Mr., Thurlin credited the company's revamped business
strategies for maintaining margins in a tough consumer electronics
market.
3M's other business units fared better. Sales from the consumer
unit rose 4% as operating income rose 8.3%. The company said growth
was propelled by strong back-to-school demand for consumer
products. 3M's industrial unit, including automotive products,
recorded a 1% sales increase and a 2% increase in operating profit.
The safety and graphics unit, which supplies materials for products
like roofing shingles, reported a 12.3% operating profit increase
on a 2.2% bump in sales.
Over all for the latest quarter, 3M earned $1.33 billion, or
$2.15 a share, compared with $1.30 billion, or $2.05 a share, a
year earlier. Analysts polled by Thomson Reuters expected $2.14 a
share. Sales were essentially flat at $7.71 billion, meeting
analysts' expectations.
3M stock was recently down nearly 3% at $166.16.
Ezequiel Minaya contributed to this article.
Write to Bob Tita at robert.tita@wsj.com
(END) Dow Jones Newswires
October 26, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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