3M Announces Q3 Sales
Revenues Weakened By Slowing Sales In Europe, Asia
Weakened by slowing sales in Europe and Asia, 3M, the parent company of industry supplier firm 3M Promotional Markets (asi/91240), has announced its overall company revenues decreased 0.5% to $7.5 billion, falling short of analysts' predictions. "We still face the challenge of sluggish economies in large developed regions like Western Europe and Japan," said CEO Inge Thulin. "In China, the year clearly has not played out the way most anticipated. Short-term challenges will not divert us, so we will continue to invest."
While revenues slipped, net income at the Minnesota-based company increased 6.7% to $1.16 billion, up from $1.09 billion during Q3 in 2011. The company cut its general and administrative costs by 3% in the third quarter, while raising prices. The firm's largest unit, industrial and transportation, reported sales of $2.6 billion, a 0.5% drop, but the division's earnings rose 9% to $575 million. U.S. consumer sales were flat for 3M, but its health-care division revenues rose 1.4%, boosted by demand for food safety and skin-care products. The company's electronics and communications division reported a 2.5% profit gain, although its sales dropped 2.1% during the third quarter, falling to $820 million.
Based on a sluggish global economy, 3M lowered its full-year forecast by a range of 1% to 2%. Thulin acknowledged Q3 market conditions will not markedly improve in the fourth quarter, saying "there are many uncertainties in the market, as we all know." While 3M does not publicly report its company's promotional products revenue, Counselor estimates that the supplier firm generates about $100 million annually in North American ad specialty sales.