Operating income was $1.8 billion and operating income margins for the quarter were 23.1%, down 1.0% point year-on-year. This result includes an incremental $136 million of strategic investments in growth, productivity and portfolio actions.
First-quarter net income was $1.3 billion, up 3.7%. The company’s operating cash flow was $1.0 billion, contributing to conversion of 53% of net income to free cash flow. 3M paid $702 million in cash dividends to shareholders and repurchased $690 million of its own shares during the quarter.
Organic local-currency sales growth was 11.5% in Electronics and Energy, 5.7% in Industrial, 4.8% in Safety and Graphics, 3.1% in Health Care, with a decline of 1.2% in Consumer. On a geographic basis, organic local-currency sales growth was broad-based, led by Asia Pacific at 10.1%; growth was 4.0% in EMEA (Europe, Middle East and Africa), 2.3% in Latin America/Canada and 1.4% in the US.
“The 3M team delivered a strong start to 2017, marked by organic sales growth of 5%, with positive growth in all geographic areas,” said Inge G. Thulin, 3M’s chairman, president and CEO. “At the same time, we increased investments across the enterprise to further accelerate growth and improve productivity, while increasing our dividend for the 59th consecutive year. In the first quarter we also announced the acquisition of Scott Safety, which will bolster 3M’s already strong position in the personal safety market.”
3M updated its guidance for 2017 due to a strong first-quarter performance and improved outlook. The company now forecasts organic local-currency sales growth to be 2% to 5%, up from previous guidance of 1% to 3%.
3M expects earnings in the range of $8.70 to $9.05 per share – up 7% to 11% year-on-year – versus a prior expectation of $8.45 to $8.80.