3M Raises Outlook During Better-Than-Expected Q1

Both its sales and earnings grew by about 4 percent over the year-ago period, beating Wall Street’s estimations.

3M Raises Outlook During Better-Than-Expected Q1
3M chief executive Inge Thulin told investors in December that 2017 would be a turnaround year for the company. That seems to be the case so far.
The Maplewood-based manufacturer of Scotch tape, Post-It notes and industrial supplies raised its financial outlook on Tuesday after posting a roughly 4 percent rise in both its sales and profits for the first three months of the year.
Led by a double-digit sales growth in its electronics and energy products division, 3M earned $1.3 billion, or $2.16 a share, in its first quarter off revenue totaling $7.7 billion. Analysts polled by Zacks Investment Research predicted earnings per share of $2.07 and $7.5 billion in sales.
Its earnings per share guidance for the year, which was previously between $8.45 and $8.80, saw a significant increase to $8.70 to $9.05 per share.
“The 3M team delivered a strong start to 2017, marked by organic sales growth of 5 percent — with positive growth in all geographic areas,” Thulin said in a statement. “At the same time, we increased investments across the enterprise to further accelerate growth and improve productivity.”
Additionally, 2017 was the year Thulin swore the company would officially increase the amount of its revenue dedicated annually to research and development. When he came on in 2012, the company was spending 5 percent of its budget on R&D. That number is set to hit 6 percent, or roughly $1.8 billion, by the end of the year.
Internal investments are intended to complement its strategic acquisitions. In March, 3M announced its second-largest acquisition ever in a $2 billion bid for Scott Safety, a manufacturer of breathing apparatus systems and gas and flame detection instruments. The addition of Scott Safety is expected to “bolster 3M’s already strong position in the personal safety market,” Thulin said.
Its safety and graphics division, the business group that houses 3M’s personal safety unit, reported sales of $1.5 billion for the quarter, a 3 percent improvement year-over-year. 3M’s industrial division, its largest of the five, saw sales grow by 4 percent to $2.7 billion during the same period. Meanwhile, its health care division took in $1.4 billion in sales (a 2 percent improvement); electronics and energy had revenues of $1.2 billion (up 11 percent); while its consumer division was the only to drop with sales of $1 billion (down roughly 1 percent).
3M shares were up slightly on Tuesday by about half percent to $195.45.
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