3M profit up, but warns of slowing sales
The company posted net income of $1.3 billion but warned that global sales are slowing at a faster rate than it expected.
Manufacturing giant 3M Co.'s net income edged up 2.6% in the second quarter, compared to the same period a year earlier, despite a 5.5% global sales decline attributable largely to unfavorable exchange rates.
The company posted net income of $1.3 billion but warned that global sales are slowing at a faster rate than it expected. 3M had $7.7 billion in sales for the quarter, with declines in all of its major divisions, including the leading industrial segment.
The company, which makes a wide variety of products ranging from Post-It Notes to high-tech phone components, warned of slowing sales.
“We are amending our growth outlook slightly to account for lower-than-expected global economic growth,” 3M CEO Inge G. Thulin said in a statement. “As always, we are focused on executing our plan and improving those factors within our control. I am confident in our team's ability to generate profitable growth and premium returns into the future.”
3M boosted its operating profit margin by 1.1 percentage points to 23.9% for the quarter.
Measured by what the company calls "organic volume," sales rose 0.8% globally in the quarter. That included a 3.9% increase in the U.S. and a 0.5% increase in Asia. But the Europe, Middle East and Asia-Pacific division fell 1.3% and the Latin America and Canada division fell 3.4%.
The company said the negative effects of currency rates would reduce its 2015 sales by 6% to 7%.
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