St. Paul, Minn.-based 3M posted profits of $1.58 billion, or $2.72 per share, on sales of $7.99 billion for the three months ended Sept. 30, amounting to a bottom-line gain of 2.6% on a -2.0% sales slide.
Adjusted to exclude one-time items, including a 14¢ gain on the sale of its gas and flame detection business, earnings per share were $2.58, well ahead of the $2.49 consensus estimate on Wall Street. Analysts there were also looking for revenues of $8.16 billion.
“The 3M team delivered strong operational performance in the third quarter,” chairman & CEO Mike Roman said in prepared remarks. “While the macroeconomic environment remains challenging, we executed well and built on the progress we made in the second quarter. We continued to effectively manage costs and reduce inventory levels, while generating strong margins and cash flow.
“We also continue to make good progress on our strategic priorities, including our recently-closed acquisition of Acelity, which is an exciting addition to 3M’s health care portfolio. Moving ahead we’ll continue to focus on driving operational improvements and investing for the future, which will position us for strong growth and premium returns as our markets recover.”
3M cut its earnings outlook for the rest of the year, saying it now expects to post adjusted EPS of $8.99 to $9.09, down from $9.25 to $9.75 previously, and raised the high end of its sales guidance. Organic constant-currency sales growth is now pegged at -1.0% to -1.5%, compared with -1.0% to -2.0% perviously.
Fourth-quarter adjusted EPS are forecast for $2.05 to $2.15 per share on an organic constant-currency sales decline of -1.0% to -3.0%.
MMM shares, which closed up 0.7% at $168.76 apiece yesterday, were down -2.8% to $163.97 each today in pre-market trading.
Healthcare profits slip despite sales growth
3M Healthcare reported operating income of $459.0 million, down -3.4% compared with Q3 2018, on sales growth of 4.7% to $1.72 billion.
“Sales grew in health information systems, food safety, medical solutions, and oral care, while drug delivery was flat; declined in separation and purification. Sales increased in the U.S., EMEA, Asia Pacific, and Latin America/Canada,” 3M said.