By Joshua Freed Associated Press
MINNEAPOLIS — 3M Co., which makes a wide range of items including Scotch tape, reflective coatings for signs, and medical products, said on Thursday that its net income rose 2.6 percent as revenue grew across most of its businesses.
It reaffirmed its full-year guidance.
3M does business all over the world, and its products are used in a wide variety of industries, so its results are watched as an economic barometer.
“First-half conditions were challenging, and 3M executed very well under the circumstances,” Chairman and CEO Inga Thule said on a conference call. “We anticipate demand recovery in the second half of the year, with some help from the macro economy and consumer electronics markets.”
3M saw a “continued slow-growth economy” in the second quarter,” he said.
The company earned $1.2 billion, or $1.71 per share, in the most recent quarter. That’s a penny better than expected by analysts surveyed by FactSet. A year ago it earned $1.17 billion, or $1.66 per share.
Revenue rose 2.9 percent to $7.75 billion. That’s just slightly less than analysts had expected, on average.
Revenue rose in each of 3M’s divisions except for its electronics and energy unit, where sales fell 3.2 percent. Profits in that unit fell 16 percent.
The electronics and energy business is suffering from a one-two punch of declining sales of films for LCD televisions, as well as a drop-off in businesses related to solar and wind energy. 3M makes adhesives and sealants for wind and solar power. Those industries are suffering from oversupply after many companies rushed to get into those businesses. Sales of wind and solar energy products fell more than 10 percent, 3M said.
“This market continues to seek a bottom, which is impacting our growth,” said David Melina, 3M’s chief financial officer. Sales should stabilize in the second half, but 3M is aiming to shift resources from wind and solar toward areas that have better growth prospects, Melina said.
Shares of 3M fell 86 cents to $115.47 in morning trading. Its shares are near the high end of their 52-week range of $88.74 to $117.30.