3M has closed its third quarter with a decline in sales and per-share earnings. Sales and per-share earnings declined 5.6% and 4.3% year-on-year, respectively. On a sequential basis, sales and per-share earnings increased 8.3% and 20.5%, respectively, and operating income margins improved by 3.1 percentage points.
versus second quarter levels.
Third quarter worldwide sales totaled $6.2 billion, a year-on-year decrease of 5.6%. Local-currency sales including acquisitions decreased 3.3. %, while currency translation effects reduced sales by 2.3%.
“These results reflect the strength of 3M’s business model as we again delivered higher than expected sales, strong operating margins and outstanding free cash flow,” said George Buckley, 3M chairman, president and CEO. “At the same time, we continued to invest in research and development, improving our supply chains and strengthening our brands and customer relationships, which will position us well as economies improve.”
3M now expects 2009 organic sales volumes to decline 9.5% to 10.5% from a previous planning assumption of negative 10% to negative 13%. All estimates quoted exclude special items.
In 3M’s Health Care business, sales of $1.1 billion were up 4.7% year-on-year in local currency. Currency impacts reduced sales by 3.1%. Local-currency sales growth was led by the skin and wound care, infection prevention and oral care businesses. Drug delivery local-currency sales were down year-on-year. Profits increased year-over-year in all businesses. All major geographic regions drove positive local-currency sales growth. Operating income rose 12% to $340 million and operating margins were 31.5%.
In the Industrial and Transportation section, sales dove 6.4% year-on-year on local currency, to $1.9 billion, including a 3% benefit from acquisitions; currency impacts reduced sales by 2.2%. 3M reported continued year-on-year declines in many large industrial markets, such as automotive OEM and home appliances, although quarter-on-quarter trends are improving. 3M posted double-digit growth in the automotive aftermarket and renewable energy business. The company reported sequential sales and operating income improved by 10.1% and 22.7%, respectively, led by the industrial adhesives and drapes and automotive OEM businesses.