3M Posts Downbeat Q1 Profit, Lowers FY Earnings Outlook

Shares of 3M Co MMM dropped more than 2 percent in pre-market trading after the company reported weaker-than-expected earnings for the first quarter and lowered its full-year forecast. The St. Paul, Minnesota-based company posted quarterly net income of $1.19 billion, or $1.85 per share, versus $1.21 billion, or $1.79 per share, in the year-ago quarter. Its sales slipped to $7.6 billion from $7.8 billion. However, analysts were expecting earnings of $1.93 per share on revenue of $7.84 billion. Industrial sales for the first quarter slipped 4.3 percent in U.S. dollars to $2.7 billion, while Safety and Graphics sales fell 3.6 percent to $1.4 billion. Health Care sales fell 3.3 percent in U.S. dollars to $1.3 billion, while Electronics and Energy sales gained 0.8 percent to $1.3 billion. Consumer sales tumbled 2.9 percent year-over-year to $1.0 billion. Operating income for the quarter was $1.7 billion, while operating income margins came in at 22.8 percent. 3M repurchased $886 million of its shares during the first quarter. The average estimate among 13 Estimize users was for earnings of $1.93 per share and revenue of $7.84 billion. "We are executing well against a more challenging economic backdrop in early 2015," said Inge G. Thulin, 3M's chairman, president and chief executive officer. "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, and expanded operating margins by nearly a full percentage point." 3M now projects full-year earnings of $7.80 to $8.10 per share, versus its earlier forecast of $8.00 to $8.30 per share. Analysts had expected earnings of $8.14 per share. 3M shares fell 2.84 percent to $160.00 in pre-market trading.