Manufacturing conglomerate 3M reported its 2016 second quarter fiscal results on Tuesday, highlighted by a continued organic sales decline year-over-year, including a sizeable decrease in electrical sales.
The St. Paul, MN-based company posted Q2 total sales of $7.7 billion, down 0.3 percent from last year. Currency headwinds dragged sales down 1.5 percent. Organic sales were down 0.2 percent.
Q2 total profit was $1.29 billion, essentially flat compared to $1.3 billion a year earlier. Operating profit of $1.9 billion was up slightly compared to last year's $1.84 billion.
By business segment:
- Industrial Q2 sales of $2.6 billion were down 0.1 percent year-over-year, while organic sales declined 1.4 percent. 3M said sales growth in automotive OEM, automotive aftermarket and abrasives was offset by declines across the rest of the portfolio. Sales decreased in the U.S. and Asia Pacific and increased in Latin America/Canada and EMEA. Operating profit increased 1.2 percent.
- Safety and Graphics Q2 sales of $1.5 billion increased 4.7 percent, with organic sales up 2.3 percent. 3M said sales growth was led by roofing granules and commercial solutions. Operating profit increased 12.8 percent.
- Health Care Q2 sales of $1.4 billion increased 3.0 percent year-over-year, with organic sales up 4.9 percent. 3M said sales grew across all businesses. Operating profit increased 4.3 percent.
- Electronics and Energy Q2 sales of $1.2 billion decreased 10.0 percent year-over-year, with organic sales down 9.1 percent. 3M said organic Electronic-related sales decreased 14 percent, with declines in both electronics materials solutions and display materials and systems. Energy-related organic sales declined 2 percent as growth in telecom was offset by declines in electrical markets and renewable energy. Operating profit decreased 18.1 percent.
- Consumer Q2 sales of $1.1 billion were up 1.7 percent year-over-year, with organic sales up 2.7 percent. 3M said the growth was led by home improvement and consumer health care. Operating profit increased 8.8 percent.
As a whole, organic sales grew by 0.4 percent in the U.S, grew 4.8 percent in Latin America/Canada and grew 3.0 percent in EMEA, and declined 5.4 percent in Asia/Pacific.
3M updated its full year organic sales outlook, decreasing it to 0 to 1 percent growth, following the range of 1 to 3 percent in forecasted after Q1. 3M forecasts foreign currency translation to reduce 2016 sales by 1 to 2 percent.
