3M Announces Full-Year Earnings Decline

3M Co., parent company of Top 40 supplier 3M/Promotional Markets (asi/91240), has announced total revenue of $30.3 billion for 2015, a year-over-year decrease of 4.9%. Organic local revenues (which don’t account for exchange rates) grew 1.3%, meaning foreign currency translation cut 3M’s sales by 6.8%. GAAP earnings totaled $7.58 per share, an increase of 1.2%.

“2015 was an important year as we prepared and positioned our company for long-term success,” said Inge G. Thulin, 3M’s chairman, president and chief executive officer. “We strengthened and focused our portfolio, made significant investments in the business to support growth, and made good progress in moving toward a more efficient business model through business transformation and our corporate restructuring.”

That restructuring included 1,500 layoffs reported in October (about 1.7% of 3M’s roughly 90,000 member workforce) in a measure to reduce structural overhead in the U.S. and other slower-growing markets such as Europe and Latin America.

3M also announced total fourth-quarter sales of $7.3 billion, a year-over-year decrease of 5.4%. Q4 organic local revenues dropped 1.1% while foreign currency translation reduced sales by 5.8% year-on-year. Q4 earnings, excluding the effect of restructuring, were $1.80 per share, a decrease of 0.6% versus the prior year. The company incurred a pre-tax charge of $114 million ($88 million after-tax) during Q4 due to the layoffs.

In 3M’s divisions, fourth-quarter sales were mixed. Local revenues in 3M’s health-care segment jumped 4.5% and its consumer segment climbed 2.7%. Sales in the firm’s electronics and energy division, however, were down 7.7%.

In its full-year outlook, 3M said it expects 2016 earnings to be in the range of $8.10 to $8.45 per share with organic local-currency sales growth of 1% to 3%. “We are building an even stronger and more competitive company for 2016 and beyond,” Thulin said.

A provider of Post-It Notes, note pads and other items to the advertising specialty industry, 3M/Promotional Markets ranks as the 15th largest supplier in the industry. As customary, 3M did not break out revenue for its promotional product business.