3M Reports First-Quarter Earnings Decline

3M Co., parent company of Top 40 supplier 3M/Promotional Markets (asi/91240), reported sales of $7.4 billion in this year’s first quarter, a decline of 2.2%. Organic local-currency sales declined .8%. Operating income grew by 3.3% to $1.8 billion while operating income margins increased 1.3% for the quarter. In total the company generated $2.05 earnings per share for the quarter.

“Our team continued to execute the 3M playbook and delivered another solid operational performance in the first quarter,” said Inge G. Thulin, 3M’s chairman, president and CEO. “We expanded 3M’s profitability, improved our cash flow generation, and increased margins over a full percentage point. At the same time, we continued to invest in the business – including opening a new, world-class laboratory in the United States – while returning cash to our shareholders.”

The company’s Safety and Graphics group recorded $1.4 billion in sales, an increase of 2.4% in organic local-currency sales. Within the group, the company said it grew sales in commercial solutions and personal safety and improved sales across all geographic areas. Its Consumer group increased organic local-currency sales by 2.8% and grew sales in the U.S. Of its remaining groups, Health Care increased 6.2%, Industrial declined 1.9% and Electronics and Energy fell 11.7%.

For the rest of 2016, the company reaffirmed its guidance of 1%-3% organic growth and earnings per share between $8.10 and $8.45.

As customary, 3M does not report quarterly promotional product revenue. In last year’s State of the Industry report, Counselor estimated that 3M/Promotional Markets generated $103 million in North American revenue in 2014, making it the 15th largest supplier.