3M Shows Positive Growth In First Quarter
3M’s first quarter 2018 financial results show sales of $8.3 billion, up 7.7 percent year-on-year and organic, local-currency sales growth of 2.8 percent for the quarter. The company, located in St. Paul, Minnesota, operates in the promotional products industry as supplier 3M Promotional Markets (PPAI 113638).
“Coming off a strong 2017, our team opened the new year with broad-based organic growth of three percent, with positive growth across all business groups,” says Inge G. Thulin, 3M chairman, president and chief executive officer. “We also continued to invest in our commercialization capabilities, while returning significant cash to our shareholders—including a 16 percent dividend increase. Going forward, we will continue to execute the 3M Playbook and leverage the world-class capabilities of our people and our enterprise, and I am confident we will deliver strong results in 2018.”
The company’s total sales grew across its categories, including 15 percent in Safety and Graphics, 7.1 percent in Industrial, 7.1 percent in Health Care, five percent in Consumer and 4.6 percent in Electronics and Energy. Organic local-currency sales increased 6.9 percent in Safety and Graphics, 2.7 percent in Health Care, 2.2 percent in Industrial, 2.1 percent in Consumer and 1.7 percent in Electronics and Energy.
On a geographic basis, total sales grew 13.7 percent in EMEA (Europe, Middle East and Africa), 10 percent in Asia Pacific, 4.3 percent in Latin America/Canada, and 3.5 percent in the U.S. Organic local-currency sales increased 4.9 percent in Asia Pacific, 3.5 percent in Latin America/Canada, 2.3 percent in the U.S., and 0.1 percent in EMEA.
First-quarter GAAP earnings were $0.98 per share, a decrease of 55 percent versus the first quarter of 2017. During the quarter, the company recorded an expense of $217 million, or $0.36 per share, related to the Tax Cuts and Jobs Act. It also resolved a lawsuit with the State of Minnesota and recorded a pre-tax charge of $897 million, inclusive of legal fees and other related obligations, resulting in a reduction to first quarter earnings of $1.16 per share. Excluding these two items, earnings were $2.50 per share, an increase of 15.7 percent year-on-year.
First-quarter operating income was $1 billion with operating margins of 12.2 percent. Excluding the legal settlement, operating income was $1.9 billion with operating margins of 23.0 percent. 3M paid $810 million in cash dividends to shareholders and repurchased $937 million of its own shares during the quarter.