3M sales rise 18 percent in Q2

Company raises outlook; industrial sales rise 23 percent

3M today reported record second-quarter earnings of $1.54 per share on sales of $6.7 billion. Sales and per-share earnings increased 17.7 percent and 37.5 percent, respectively, versus the second quarter of 2009.

Sales improved in all businesses and geographic regions, with particular strength in Electro and Communications at 32 percent, Display and Graphics at 30 percent and Industrial and Transportation at 23 percent. On a geographic basis, sales growth was strongest in emerging economies, where sales expanded by 38 percent versus the second quarter of 2009. Total-company sales rose 18 percent year-on-year and 6 percent sequentially, and have now returned to second quarter 2008 levels.

3M generated record second-quarter operating income of $1.596 billion and operating margins were 23.7 percent. All six of the company's business segments posted operating margins of 22 percent or higher.

"Our growth strategy continues to gain momentum as we again delivered strong top-line growth and outstanding leverage to the bottom line," said George W. Buckley, 3M chairman, president and chief executive officer. "I thank the 3M team around the world for continuing to deliver during these uncertain times."

Buckley added that the second-quarter results reaffirm the company's long-term strategy of accelerating investment in higher growth opportunities.

"Our new product vitality index is the highest in recent memory and we are taking share in many of our businesses," he said. "3M's improved engine of organic growth, combined with our commitment to operational excellence positions us well to deliver sustainable increases in sales, earnings and free cash flow."
For the third consecutive quarter, 3M increased its full-year 2010 performance expectations. The company now expects organic sales volumes to grow 13 to 15 percent versus a prior expected range of 10 to 12 percent.

Second-quarter worldwide sales totaled $6.7 billion, up 17.7 percent compared to the second quarter of 2009. Local-currency sales including acquisitions increased 17.9 percent. Divestitures and foreign exchange impacts each reduced sales by 0.1 percent.
Sales growth was broad-based, with year-on-year increases of 32 percent in Electro and Communications, 30 percent in Display and Graphics, 23 percent in Industrial and Transportation, 10 percent in both Consumer and Office and in Safety, Security and Protection Services and 5 percent in Health Care. On a geographic basis, sales rose 42 percent in Asia Pacific, 21 percent in Latin America and Canada and 9 percent in the United States. Sales rose over 4 percent in Europe in the quarter, as organic volume growth of nearly 11 percent was partially offset by 6-plus points of negative currency impact, primarily due to the weaker Euro.

Second-quarter worldwide sales totaled $6.7 billion, up 17.7 percent compared to the second quarter of 2009. Local-currency sales including acquisitions increased 17.9 percent. Divestitures and foreign exchange impacts each reduced sales by 0.1 percent.
Sales growth was broad-based, with year-on-year increases of 32 percent in Electro and Communications, 30 percent in Display and Graphics, 23 percent in Industrial and Transportation, 10 percent in both Consumer and Office and in Safety, Security and Protection Services and 5 percent in Health Care. On a geographic basis, sales rose 42 percent in Asia Pacific, 21 percent in Latin America and Canada and 9 percent in the United States. Sales rose over 4 percent in Europe in the quarter, as organic volume growth of nearly 11 percent was partially offset by 6-plus points of negative currency impact, primarily due to the weaker Euro.

Second-quarter net income was $1.121 billion, or $1.54 per share, versus $783 million, or $1.12 per share, in the second quarter of 2009. Total-company operating income was $1.596 billion, a record for any second quarter in 3M's history, and margins were 23.7 percent.

Here is a look at some of 3M’s markets:

Industrial and Transportation
Sales of $2.2 billion, up 23.2 percent in local currency.
Broad-based double-digit local-currency growth across much of the portfolio; renewable energy up 71 percent, automotive OEM up 45 percent, abrasives up 28 percent and industrial adhesives and tapes up 22 percent.
All businesses delivered year-on-year profit growth.
Double-digit sales and profit growth across all major geographic regions, led by Asia Pacific.
Operating income up 66 percent to $476 million with operating margin of 22 percent.
percent. All six of 3M's business segments posted operating margins of 22 percent or higher.

Industrial and Transportation
Sales of $2.2 billion, up 23.2 percent in local currency.
Broad-based double-digit local-currency growth across much of the portfolio; renewable energy up 71 percent, automotive OEM up 45 percent, abrasives up 28 percent and industrial adhesives and tapes up 22 percent.
All businesses delivered year-on-year profit growth.
Double-digit sales and profit growth across all major geographic regions, led by Asia Pacific.
Operating income up 66 percent to $476 million with operating margin of 22 percent

Safety, Security and Protection Services
Sales of $842 million, up 10.3 percent in local currency.
Double-digit sales increases in security systems, roofing granules and building and commercial services; high single-digit growth in the personal protective equipment business.
Broad-based geographic growth with double-digit sales gains in Canada, Asia Pacific, Latin America and the United States.
Operating margin of 23.4 percent, with profits up 9 percent year-on-year