Operating income was $1.9 billion and operating income margins for the quarter were 24.4%, up 0.5 pecentage points year-on-year. Second-quarter net income was $1.3 billion. The company’s operating cash flow was $1.3 billion, contributing to conversion of 75% of net income to free cash flow.
Organic local-currency sales growth was 4.9% in Health Care, 2.7% in Consumer and 2.3% in Safety and Graphics, with declines of 1.4% in Industrial and 9.1% in Electronics and Energy. On a geographic basis, organic local-currency sales growth was 4.8% in Latin America/Canada, 3.0% in EMEA (Europe, Middle East and Africa) and 0.4% in the U.S., with a decline of 5.4% in Asia Pacific.
“Building on a solid first quarter performance, our team controlled the controllable and posted another quarter of strong earnings and expanded margins,” said Inge G. Thulin, 3M’s chairman, president and CEO. “Our execution of the 3M playbook is enabling us to deliver premium returns today while also building for the future, which includes making good progress on business transformation and investing approximately 10% of our sales into R&D and capital expenditures in the quarter.”
Looking ahead, 3M now expects 2016 earnings to be in the range of $8.15 to $8.30 per share – up 8% to 10% year-on-year – versus a prior expectation of $8.10 to $8.45.
Industrial segment recorded sales of $2.6 billion, down 0.1% in US dollars. Sales growth in automotive OEM, automotive aftermarket and abrasives was offset by declines across the rest of the portfolio. Operating income was $615 million, up 1.2% year-on-year, with an operating margin of 23.4%.
Safety and Graphics sales were $1.5 billion, up 4.7% in US dollars. Sales growth was led by roofing granules and commercial solutions. Operating income was $411 million, an increase of 12.8% year-on-year, with an operating margin of 27.4%.
Health Care segment sales were $1.4 billion, up 3.0% in US dollars, with sales growing across all businesses. Operating income was $460 million, an increase of 4.3% year-on-year, with an operating margin of 32.7%.
Electronics and Energy sales were $1.2 billion, down 10.0% in US dollars. Electronics-related sales decreased 14%, with declines in both electronics materials solutions, and display materials and systems; energy-related sales declined 2% as sales growth in telecom was offset by declines in electrical markets and renewable energy. Operating income was $229 million, down 18.1% year-on-year, with an operating margin of 19.3%.
Consumer segment sales were $1.1 billion, up 1.7% in US dollars. Sales growth was led by home improvement and consumer health care. Operating income was $281 million, up 8.8% year-on-year, with an operating margin of 24.9%.