3M Reports Quarterly Financials
Analysts Say 3M Was Hurt By Foreign Monetary Exchanges
Citing weaker results across Europe and Asia, 3M, the parent company of industry supplier firm 3M Promotional Markets (asi/91240), has announced its overall company revenues decreased 1.9% to $7.53 billion in the second quarter. Analysts say 3M was hurt by foreign monetary exchanges, noting that if currencies weren't translated into dollars, the firm's global sales would have actually grown by nearly 2%. Even as sales fell, though, company earnings rose slightly by 0.6% to $1.17 billion or $1.66 per share.
"We went into the year with a plan that was conservative and we've been very cautious," said Inge Thulin, 3M's president and CEO. "And we have some parts of the world like Western Europe at the moment where there are challenges relative to economic outlook. So, we are managing that very, very tightly. At the same time, when we see opportunities for growth we invest."
In Q2, 3M's largest business segment industrial and transportation endured a sales slide of 0.6% to $2.6 billion, yet category earnings jumped 13% to $614 million. Buoyed by sales of safety and information products, health care-related revenues rose to $1.3 billion, a 1.1% increase. 3M said its quarterly profit margin improved to 22.9%, a gain attributed to better factory efficiency, cost cutting and moderate price hikes.
3M did not change its full-year forecast and expects earnings of between $6.35 and $6.50 per share, with a slight decrease in revenues attributable to the strength of the dollar. While Minnesota-based 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.