By James R. Hagerty
3M Co.'s sales growth in the second quarter fell short of Wall
Street expectations amid sluggishness in Asia and Europe and weak
demand for materials used in solar-energy panels and flat screens
for electronic devices.
Profit grew 2.6% and margins widened, but the St. Paul,
Minn.-based maker of adhesives, abrasives and films slightly
reduced its forecast for full-year earnings per share. The
company's new forecast range is $7.80 to $8, down from the range of
$7.80 to $8.10 announced three months ago. In 2014, earnings per
share were $7.49.
The company, whose best-known products include Scotch tape and
Post-it Notes, said operating profit margins in the second quarter
were 23.9%, up 1.1 percentage points from the already strong year-
earlier level. Much of that improvement came from lower
raw-material costs.
3M reported strong demand for water-purification filters and
materials used in making airplanes, cars and roofing shingles.
Profit was $1.3 billion, or $2.02 per share, up from $1.27
billion, or $1.91 per share, a year earlier. Wall Street had
expected earnings of about $2 a share, according to FactSet. Sales
fell 5.5% to $7.69 billion, well below analyst forecasts of around
$7.8 billion. Organic sales, excluding currency effects and recent
acquisitions, grew just 1.8%, far below the company's long-run
target of 4% to 6%. General Electric Co., another giant industrial
conglomerate, had 5% organic growth in the latest quarter.
3M's organic sales grew 4.1% in the U.S. and 17% in Mexico but
were down 1% in Western Europe and 2% in China.
3M's thousands of products include Scotch-Brite sponges, masking
tape, medical and dental supplies, Nexcare skin cream and automated
systems used to track books in libraries.
Write to James R. Hagerty at bob.hagerty@wsj.com
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