How Will 3M Perform In Q2 2016?

by Trefis Team
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3M (NYSE:MMM) is expected to release its second quarter earnings on July 26, 2016, before markets open.

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Highlights Of Q1:

1) Negative Impact Of Foreign Currency Fluctuations

  • Foreign currency played a dampener, reducing sales by 3%.
  • The biggest impact was seen in Latin America and Canada, where sales declined 15.7% due to FX.

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2) Growth Driven By Safety & Graphics and Healthcare

  • The segments witnessed growth rates of 2.9% and 4%, respectively.
  • In Safety & Graphics, sales increased 4% in Asia Pacific, 2% in both the US and EEMA, and 1% in Latin America and Canada, with improving margins as a result of higher selling prices and lower material costs.
  • In Healthcare, sales growth was seen across the portfolio, led by food safety, and health information systems.
  • Growth in Healthcare was led by 11% growth in Asia Pacific, 9% in Latin America and Canada, 6% in EEMA, and 4% in the US.

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3) Decline In The Electronics & Energy Segment

  • Sales declined 18% on an organic local-currency basis, due to a soft end market demand and high channel inventory.
  • Sales were flat in EEMA, Latin America and Canada, and the US, and declined 18% in Asia Pacific, where the company’s electronics business is concentrated.
  • Lower organic volume and foreign currency effects negatively impacted the margins.
  • 3M plans to reduce ~250 positions in this business worldwide, incurring a Q2 expense of $20M.

Have more questions on 3M? Have a look at these links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for 3M.
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