3M reported first-quarter earnings of $1.61 per share, an increase of 1.3% versus the first quarter of 2012. Sales rose 2.0% year-on-year to $7.6 billion, an all-time first-quarter record. Organic local-currency sales grew 2.1% and acquisitions added 1.7% to sales. Currency impacts reduced sales by 1.8% year-on-year.
Operating income was $1.6 billion and operating income margins for the quarter were 21.6%. First-quarter net income was $1.1 billion and free cash flow was $670 million.
“We achieved record first-quarter sales and solid operating margins in the face of a low-growth economic environment and the strong U.S. dollar,” said Inge G. Thulin, 3M chairman, president and chief executive officer. “At the same time, we further strengthened the company through increased investments in innovation, commercialization and manufacturing.”
The company paid $440 million in cash dividends to shareholders and repurchased $805 million of its own shares during the quarter.
Organic local-currency sales growth was 4.0% in Health Care, 3.7% in Consumer, 2.9% in Industrial and 2.3% in Safety and Graphics; Electronics and Energy declined 2.2% year-on-year. On a geographic basis, organic local-currency sales grew 7.3% in Latin America/Canada, 2.3% in the U.S. and 1.9% in Asia Pacific; EMEA (Europe, Middle East and Africa) declined 0.8% year-on-year.
3M anticipates 2013 earnings to be in the range of $6.60 to $6.85 per share versus a previous expected range of $6.70 to $6.95 per share. The company continues to forecast organic local-currency sales growth of 2 to 5% for the year. Foreign currency translation is expected to reduce full-year sales by approximately 1.5%. 3M previously anticipated no impact to 2013 sales from foreign currency translation.
“Considering the stronger U.S. dollar and softer demand in some end markets, it is prudent to alter our outlook a bit for 2013,” said Thulin. “We remain confident looking ahead and are keenly focused on things within our control – advancing our strategic objectives, driving productivity and improving the business. 3M’s unique combination of technology strength, manufacturing excellence and global capability will enable us to deliver sustainable increases in sales, earnings and cash flow.”