3M Matches Views, Trips Upper End of Forecast

Earnings Dow Jones Newswires

3M Co. lowered the high end of its 2015 per-share earnings guidance as the manufacturing giant also reported its second-quarter earnings rose 2.6%, though a strong U.S. dollar hurt revenue.

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For the year, 3M reduced the high end of previous per-share earnings guidance by a dime and now expects $7.80 to $8.00 as its narrowed its outlook for organic revenue growth—which excludes currency fluctuations and some other items—to between 2.5% and 4% from its previous estimate of between 3% to 6%.

Chief Executive Inge Thulin said in prepared remarks on Thursday that the changed outlook reflects lower-than-expected global economic growth.

3M makes adhesives, abrasives, coatings and films used in thousands of industrial and consumer applications, including manufacturing and repair of cars and aircraft.

The St. Paul, Minn., conglomerate's deal last month to acquire Capital Safety for $1.8 billion shows 3M is willing to increase the size of its acquisitions as part of a strategy to produce steady sales growth.

3M typically makes smaller acquisitions. Investors likely will be watching for more details about the planned Capital Safety acquisition during the company's conference call.

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Overall, 3M reported a profit of $1.3 billion, or $2.02 a share, up from $1.27 billion, or $1.91 a share, a year earlier. Revenue decreased 5.5% to $7.69 billion. Excluding currency effects and acquisitions, revenue grew 1.8%.

Analysts polled by Thomson Reuters expected per-share profit of $2 and revenue of $7.83 billion.

Operating margin rose 1.1 percentage point to 23.9%.

 

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