3M Co. (MMM) reported an 8% increase in earnings for the third quarter helped by stronger margins and lower income taxes provision. However, the bottom line missed analysts’ expectations. The industrial mammoth lowered its earnings guidance for the full year 2018. Following this, the stock dipped over 6% in the premarket session.
Net income rose 8% to $1.54 billion and earnings increased 11% to $2.58 per share. Sales inched down 0.2% to $8.2 billion.
Organic local-currency sales increased 1.3% while acquisitions, net of divestitures, increased sales by 0.2%. Foreign currency translation decreased sales by 1.7% year-on-year.
Total sales grew 7% in Safety and Graphics helped by growths in personal safety, transportation safety, and commercial solutions. Industrial sales were flat as declines in automotive aftermarket offset growths in advanced materials, automotive and aerospace, and industrial adhesives and tapes.
Health Care sales fell 2.8% on the decline in drug delivery. Electronics and Energy sales dropped 4.8% due to decreases in EMEA. Consumer sales decreased by 3.4% due to declines in stationery and office supplies, home care, and consumer healthcare.
On a geographic basis, total sales grew 1.6% in the Asia Pacific and 1.3% in the US, while total sales declined 3.9% in EMEA and 5.5% in Latin America/Canada.
Looking ahead into the full year 2018, the company lowered its GAAP earnings guidance to the range of $8.78 to $8.93 per share from the prior estimate range of $9.08 to $9.38 per share. Adjusted EPS outlook was reduced to the range of $9.90 to $10.00 from the previous range of $10.20 to $10.45.
In addition, 3M now expects its full-year organic local-currency sales growth of about 3% compared to the prior estimate range of 3% to 4%. Free cash flow conversion forecast was lowered to the range of 90% to 95% from the previous outlook range of 90% to 100%.
Shares of 3M ended Monday’s regular session up 0.76% at $201.36 on the NYSE. The stock has fallen over 14% in the year so far and over 9% in the past year.