3M's Stock Drops After Profit Tops Views But Sales Fall Short

By Tomi KilgoreMarketsMarketWatch Pulse

3M Co.'s stock dropped 1.5% in premarket trade Tuesday, after the maker of Post-it notes and Scotch tape reported second-quarter earnings that topped expectations but sales that missed. Earnings for the latest quarter came in at $1.29 billion, or $2.08 a share, compared with $1.30 billion, or $2.02 a share, in the same period a year ago. The FactSet consensus for earnings per share was $2.07. Revenue slipped 0.3% to $7.66 billion from $7.69 billion, missing the FactSet consensus of $7.71 billion. Declines in industrial and electronics and energy revenue offset growth in safety and graphics, health care and consumer. Looking ahead, the maker of Post-it notes and Scotch tape revised its 2016 EPS outlook to $8.15 to $8.30 from $8.10 to $8.45; the FactSet consensus was $8.23. "Our execution of the 3M playbook is enabling us to deliver premium returns today while also building for the future, which includes making good progress on business transformation and investing approximately 10 percent of our sales into R&D and capital expenditures in the quarter," said Chief Executive Inge Thulin. The stock had run up 19% year to date through Monday, while the Dow Jones Industrial Average has gained 6.1%.

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