3M Cuts Full-Year Outlook Again After Challenging Q3
3M once again lowered its full-year outlook on Tuesday after its third quarter results came in slightly below last year’s figures.
The Maplewood-based industrial supplies manufacturer said it took in sales of $7.7 billion for the July to September period. Due to the company’s improved overall operating margin (24.7 percent), its operating income profits rose about 5 percent from a year ago to $1.9 billion. Earnings per share of $2.15 not only topped last year’s numbers, but also beat Wall Street’s estimate by a penny.
Nevertheless, 3M shaved a dime off its 2016 outlook to now stand at $8.15 to $8.20 earnings per share.
In a conference call Tuesday morning, 3M CEO Inge Thulin said the company has been facing a macro environment that is “challenging at the moment.”
“We have done a lot of work over the last several years to adjust our portfolio, improve our cost structure, enhance our technology capabilities, and make us even more relevant to customers,” he said. “We are positioned well for when global growth conditions improve.”
Four out of five 3M business sectors recorded improved sales during the recent quarter. Industrial products, which make up 3M’s largest division, had sales grow (up 1 percent to $2.6 billion). Sales also increased in its safety and graphics department (up 2.2 percent to $1.4 billion), health care department (up 1.1 percent to $1.4 billion), and consumer department (up 4 percent to $1.2 billion).
With tapering demand for consumer electronics, 3M’s electronics and energy department reported the only sales slump during the third quarter, continuing a nearly two year streak of decreasing year-over-year sales. The division took in $1.29 billion during the three-month period compared to $1.39 billion a year ago—amounting to a 7.5 percent drop.
The downbeat quarterly report led to a 3 percent drop in 3M’s stock price. After closing at $171.27 on Monday, shares were trading around $166 as of mid-day Tuesday.