3M Co. (MMM) posted better-than-expected second quarter earnings Tuesday, but lowered its full-year profit guidance amid a bigger hit from the surging U.S. dollar and weaker respirator sales.
3M said adjusted profits for the three months ending in September were pegged at $2.69 per share, up 9.8% from the same period last year and 9 cents ahead of the Street consensus forecast. Group revenues, 3M said, fell 4% to $8.6 billion, just shy of analysts' forecasts of an $8.7 billion tally.
Looking into the final months of the year, 3M said it now sees adjusted earnings in the region of $10.10 2 to $10.35 share, down from its prior forecast of $10.30 to $10.80 per share range it forecast in April, citing the ongoing strength of the U.S. dollar.
Organic sales were forecast to rise between 1.5% and 2%, 3M said, down from its prior estimate range of between 1.5% and 3%.
"We continue to execute our strategies and deliver for our customers in a highly uncertain environment," said CEO Mike Roman. "Excluding the impact of the decline in disposable respirator sales, our team posted over 3% organic growth. We delivered sequential and year-over-year margin expansion, amidst macroeconomic challenges and the strengthening U.S. dollar."
"We continue to position 3M for the future through investments for growth, productivity and sustainability, along with active portfolio management," he added. "This quarter we divested our food safety business and began executing the work-streams to successfully spin our Health Care business, resulting in two world-class, public companies."
3M shares were marked 0.4% lower in early trading immediately following the earnings release to change hands at $117.92 each, extending the stock's six-month decline to around 20.6%.
Last month, two U.S. military veterans challenged 3M's plans to spin-off its healthcare business, which it unveiled earlier this summer, telling a Florida court that it would "wall off" assets from lawsuits linked to alleged harm from Combat Arms Earplugs version 2, which were made by a now bankrupt 3M subsidiary Aearo Technologies LLC.
3M said in August that the tax-free spinoff of its healthcare division, which follows earlier plans to separate 3M's food safety business, will be completed by the end of next year.
