3M Co. saw improvements in all its businesses in the April-to-June quarter.
Ariana Lindquist, Bloomberg
3M's electronics unit revives, lifting 2Q profit
- Article by: Dee DePass
- Star Tribune
- July 25, 2014 - 5:50 AM
3M Co. for the second straight quarter saw all of its businesses grow in sales and profits, including the electronics unit that slumped last year.
The across-the-board performance fueled a 6 percent jump in net profit and was shaped by strong gains in Asia and Europe, which outpaced the U.S. and Latin America. Executives reaffirmed their financial guidance for the rest of the year.
“Our businesses continued to execute very well during the second quarter,” CEO Inge Thulin told analysts in a conference call. “Organic sales growth was again positive across all businesses and geographic regions, which helped drive double-digit growth in earnings per share.”
Shares of Maplewood-based 3M popped up about 2 percent Thursday morning following the earnings announcement, then drifted lower through the day and finished up 0.3 percent, or 45 cents, to $145.13.
Barclays Bank analyst Scott Davis said there was “not much to pick on in the quarter. It was solid overall.”
It was “very good and impressive,” said Deutsche Bank analyst David Begleiter.
Net profit was $1.27 billion, or $1.91 a share, in line with analysts’ expectations. Revenue grew 4.9 percent to $8.13 billion, exceeding the $8.09 billion expected by analysts.
3M experienced its fastest organic-sales growth in Asia, at nearly 7 percent, followed by Europe, the Middle East and Africa at 5 percent, with the United States and Latin America at slower rates.
The most improvement came in 3M’s recently struggling electronics and energy unit, where sales jumped 6.2 percent to $1.4 billion and operating income rose 23 percent to $293 million. The division, which makes films for screens used in TVs, tablets and cellphones, suffered sales declines as recently as the last three months of 2013.
3M’s industrial division, its largest, increased sales by 4.9 percent to $2.8 billion as demand rose for filtration, automotive, airplane, adhesive and abrasive products. Operating income rose 2.4 percent to $617 million.
Its safety and graphics division saw sales rise 4.1 percent to $1.5 billion, as demand rose for personal and commercial safety products, particularly in China. Health care sales rose 5.9 percent to $1.4 billion led by demand for medical records software and infection prevention products. The consumer division saw sales rise 3.7 percent to $1.1 billion.
The company continued to boost capital spending in the quarter. It also spent $2 billion for dividends and share repurchases in the period.
Dee DePass • 612-673-7725
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