3M Posts Sales Decline In Third-Quarter Financial Report
3M has released its third-quarter 2019 financial results, reporting sales of $8 billion, down two percent year-on-year, and a decline in organic local-currency sales of 1.3 percent, year-on-year, while acquisitions, net of divestitures, increased sales by 0.6 percent. Foreign currency translation decreased sales by 1.3 percent year-on-year. The company, located in St. Paul, Minnesota, operates in the promotional products industry as supplier 3M Promotional Markets (PPAI 113638).
“The 3M team delivered strong operational performance in the third quarter,” says Mike Roman, 3M chairman and CEO. “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.”
Roman adds, “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.”
The company reports that total sales grew 4.7 percent in Health Care and 1.7 percent in the Consumer category, with declines of 4.4 percent in Transportation and Electronics and 5.7 percent in Safety and Industrial. Organic local-currency sales increased 2.6 percent in Consumer and two percent in Health Care, with declines of 3.3 percent in Safety and Industrial, and 3.4 percent in Transportation and Electronics.
Looking at results on a geographic basis, 3M reports that total sales grew 0.8 percent in the U.S. and 0.6 percent in Latin America/Canada, with declines of 4.1 percent in EMEA (Europe, Middle East and Africa) and five percent in Asia Pacific. Organic local-currency sales increased 2.8 percent in Latin America/Canada and two percent in EMEA, with declines of 1.1 percent in the U.S. and 4.4 percent in Asia Pacific.
3M says that its third-quarter GAAP earnings were $2.72 per share, an increase of 5.4 percent year-over-year, which included a benefit of $0.14 per share from the divestiture of the gas and flame detection business. Also, third-quarter operating income was $2 billion, including a benefit of $112 million from the divestiture of the gas and flame detection business. Operating margins were 25.2 percent which includes a 1.4 percentage point benefit from the divestiture.