Minnesota-based 3M, the parent company of Top 40 supplier 3M Promotional Markets (asi/91240), has announced that its first-quarter sales decreased to $7.6 billion, a year-over-year decline of 3.2%. The drop in sales was largely the result of a strengthening U.S. dollar, as 3M reported its local-currency revenues actually increased by 3.3% in Q1.
“We are executing well against a more challenging economic backdrop in early 2015,” said Inge Thulin, 3M’s chairman. “The stronger U.S. dollar negatively impacted sales and earnings in the first quarter, and global economic growth was mixed. Despite these near-term challenges, we grew organically in all business groups and all geographic areas.”
In Q1, the firm’s electronics and energy segment was the only business unit to report sales growth across all measures. The segment produced total revenues of $1.3 billion, up 0.8% in U.S. dollars and 5.8% in local currency. Meanwhile, 3M said sales in its largest segment, industrial products, fell 4.3% in U.S. dollars. The unit’s operating income was $598 million, down 3.3% year-over-year. 3M’s remaining business units – health care, consumer safety and graphics – all reported sales gains on a local currency basis. Foreign currency translation reduced sales by at least 5%, however, in each segment. As is customary, 3M did not break out quarterly ad specialty sales in its earnings release.
Looking forward, 3M maintained its full-year sales forecast, expecting organic local-currency growth of 3%-6% in 2015. The firm lowered its per-share profit outlook, though, to a range of $7.80 to $8.10, in light of the stronger U.S. dollar. On its Top 40 list, Counselor ranks 3M Promotional Markets as the 13th-largest supplier in the industry, estimating the firm generates $100 million in annual North American ad specialty sales.