MINNEAPOLIS (AP) — 3M said Thursday its first-quarter profit barely rose as it faced weaker demand. It cut its profit guidance for the full year.
3M's Scotch tape and construction and safety materials make it a good window into the broader economy. It has operations all over the world, so a stronger dollar hurt its revenue because many of its goods are sold in other currencies.
The company faced a "low-growth economic environment" during the quarter, said Inge G. Thulin, 3M's chairman, president, and CEO.
Net income for Maplewood, Minnesota-based 3M Co.'s was just slightly higher from a year ago at $1.13 billion, or $1.61 per share. A year ago its net income worked out to $1.59 per share. Revenue rose 2 percent to $7.63 billion. Revenue and profits were both short of analyst expectations of $1.65 per share and revenue of $7.81 billion.
The stronger U.S. dollar and "softer demand in some end markets" are prompting 3M to cut its guidance, Thulin said. For the full year, it now expects to earn $6.60 to $6.85 per share. It had previously predicted $6.70 to $6.95.
Analysts had been expecting a profit of $6.83 per share, according to FactSet. It didn't make a revenue prediction, but said currency issues will reduce revenue by 1.5 percent, whereas previously it had expected no impact from currency.
Operating profits in its industrial division — the company's biggest by revenue — fell almost 3 percent to $576 million. Profits rose slightly in its safety and graphics and health care divisions, and dropped 16 percent in its electronics and energy division as revenue declined. Operating profits were flat in its consumer division, where products include Scotch tape and Post-it notes.
3M shares dropped $3.29, or 3 percent, to $104.58 in premarket trading. 3M is one of the 30 stocks in the Dow Jones industrial average, and the shares had been near their 52-wek high of $108.72.