3M, North Mankato, Minn., today reported second-quarter earnings of $2.58 per share, an increase of 24 percent versus the second quarter of 2016. Sales were $7.8 billion, up 1.9 percent year-on-year in dollar terms. Organic local-currency sales increased 3.5 percent while divestitures reduced sales by 1 percent. Foreign currency translation decreased sales by 0.6 percent year-on-year.
Operating income was $2.2 billion and operating income margin for the quarter was 28.0 percent, up 3.6 percentage points year-on-year. This result includes a net benefit of $273 million, which is comprised of divestiture gains of $451 million (net of lost operating income), partially offset by $178 million of incremental investments in accelerated growth programs, productivity and portfolio actions. Second-quarter net income was $1.6 billion, up 22.6 percent.
Total sales grew 7.5 percent in electronics and energy, 2.5 percent in industrial, 1.8 percent in health care, and 0.5 percent in consumer. Total sales declined 0.9 percent in safety and graphics. Organic local-currency sales increased 8.4 percent in electronics and energy, 3.8 percent in industrial, 3.2 percent in safety and graphics, 2.5 percent in health care, and 0.7 percent in consumer.
On a geographic basis, total sales grew 8.3 percent in Asia Pacific, 2.5 percent in Latin America/Canada, and 0.5 percent in the U.S. Total sales declined 3.6 percent in EMEA (Europe, Middle East and Africa). Organic local-currency sales increased 10 percent in Asia Pacific, 3.7 percent in Latin America/Canada, and 1.9 percent in the U.S. Organic local-currency sales declined 1.6 percent in EMEA.
“Our team posted another quarter of strong and broad-based organic growth, which included positive growth across all five of our business groups,” said Inge G. Thulin, 3M chairman, president and CEO. “We also continued to deliver premium margins and returns, while accelerating investments to support growth and strengthen the portfolio, which is part of our playbook to build an even stronger and more competitive 3M.”
Coming off a strong first half of the year, 3M updated its guidance for 2017. The company now forecasts organic local-currency sales growth to be 3 to 5 percent, up from previous guidance of 2 to 5 percent. 3M expects earnings in the range of $8.80 to $9.05 per share—up 8 to 11 percent year-on-year—versus a prior expectation of $8.70 to $9.05.
For more information on 3M, visit www.3m.com.
