3M’s industrial division, the largest of its five business units, carried the Maplewood-based company to a year-over-year increase in its revenue and profit during the fourth quarter.
Sales of industrial products, such as automotive and aerospace materials, rose 3 percent year-over-year to $2.5 billion. Altogether, the segment made up more than one-third of 3M’s fourth quarter sales, which totaled $7.33 billion.
Fourth quarter revenue matched the result predicted by analysts polled by Thomson Reuters and beat 2015 sales by 0.4 percent. However, the Maplewood-based company’s $1.16 billion in profit — up from $1.04 billion a year earlier — edged ahead of analyst expectations. 3M reported earnings per share of $1.88, one penny more than the analyst forecast.
Aside from the company’s safety and graphics division, which had revenue improve 0.6 percent from the year-ago quarter to $1.3 billion, all other 3M divisions reported drops in revenue.
Weak demand for oral care and health information systems pushed revenue from the company’s health care division down 0.1 percent to $1.4 billion during the three-month period ending December 31. 3M’s electronics and energy division continued to struggle as sales of its display materials, such as films for smartphone screens, and energy-related components slipped. Altogether, the division’s sales were down 1 percent year-over-year to $1.2 billion.
Sales of consumer products fell 0.7 percent from the year-ago quarter to $1.1 billion, as fewer stationery and office products were sold.
“Throughout the year we executed the 3M playbook and delivered a strong operational performance, and built for the future through our three key levers: portfolio management, investing in innovation and business transformation,” Inge Thulin, CEO of 3M, said in a statement.
Of the three “levers,” 3M arguably leaned heaviest on portfolio management last year. The company sold off more than a half-dozen of its business units for well over $1 billion altogether
. Since 2012, 3M has realigned from six business divisions to five, and has slimmed down from 40 business units to just over 20.
R&D investments were also a high priority, as the company opened a $150 million research and development lab
last March. Several months after that, 3M unveiled its new design center
, which is roughly four times the size of the prior studio.
Looking ahead, Thulin said, “We are well positioned to build on this momentum and deliver another strong performance in 2017.”
In early morning trading, 3M stock fell as much as $3.22, or nearly 2 percent, from its Monday close of $178.50. As of midday Tuesday, the price per share returned to about $177.50.