3M Outperforms Wall Street Expectations In Q1
3M started off the year by edging past Wall Street expectations in its first quarter. Despite a 2 percent year-over-year sales drop, the company posted a 6 percent profit hike on $7.4 billion in revenue for the three-month period ending March 31.
Wall Street expected the Maplewood-based manufacturer of Post-It Notes, sandpaper and industrial supplies to report $7.3 billion in sales. Additionally, 3M’s earnings per share came in 13 cents above expectations at $2.05 per share.
With the strong state of the U.S. dollar, foreign currency translations took a 3 percent slice out of 3M’s total sales compared to last year. Accounting for the negative exchange rate effects, three out of five 3M divisions—safety and graphics, health care, and consumer goods—still managed to drive sales increases.
Industry goods, which is the largest of 3M’s core business segments and includes automotive materials, posted a 3 percent revenue drop. Meanwhile, the company’s electronics and energy division took the largest hit, a 13.6 percent year-over-year fall in sales. Similar to previous quarters, waning demand for materials used to construct smartphones, tablets and televisions have continued to hamper this division.
Nevertheless, 3M CEO Inge Thulin was pleased with the company’s first quarter performance. “Our team continued to execute the 3M playbook and delivered another solid operational performance,” he said.
3M maintained its full-year forecast of earnings per share in the range of $8.10 to $8.45 and to raise organic sales by 1 to 3 percent. To bolster the company’s growth, Thulin said the company would continue investing money back into the company as it did most recently with the opening of a new $150 million research and development lab.
Company stock has fallen throughout the day following the quarterly release. From its Monday close at $168.38 a share, the price dropped to $165.64 by noon Tuesday.