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3M sees weaker consumer-electronics demand
Dow Janes Newswires
Updated:7?/15�2015 04:42:16 PM CST Twi nC ities.com
3M sees weaker consumer-electronics demand
Slowing demand for consumer electronics products and industrial supplies forced 3M Co.to reduce its forecasts fa earnings and sales growth.
Executives of the Maplewood-based conglomerate,whose products range from Scotch lape to sandpaper and dental supplies--and components for consumer elecVOnics products,told analysts
Tuesday they expect sluggish growth in the new year but don't see the world economy tipping i nto a deep slump.
3M shares lost 6 percent Tuesday.
Global demand for smartphones,tablet computers and television sets has weakened,said 3M Chief Executive Inge Thulin.3M supplies films,adhesives,coatings and other materials used in making
those products.Sales of thase materials will be lower fa one or lwo quarters,Thulin predicted,but"it will come back again."
3M also is seeing a broad-based decline in demand from U.S.industrial companies that buy the company's abrasives,adhesives and other materials.The health-care and consumer products
businesses remain strong,3M said.
3M cut its forecast fa 2015 full-year earnings per share to$7.55,com pared with an earlier forecast of$7.60 to$7.65 per share.The latest forecast would mark an increase of just 0.8 percent from
$7.49in 2014.
For 2016,3M projected earni ngs of$8.10 to$8.45 per share,up 7 percent to 12 percent from 2015.The consensus among W all SVeet analysts had been around$8.43,according to FactSet.
Repurchases of shares--expected to total$4 billion to$6 billion--should account for 25 to 35 cents of those earnings,3M said.
Organic sales growth,excluding recent acquisitions and currency effects,will be 1 percent in 2015,compared with a prior expectation of 1.5 percent to 2 percent,3M forecast.For 2016,3M sees
organic sales growth of 1 percent to 3 percent.That is below the company's longrun goal of 4 percent to 6 percent.Organic sales in the fourth quarter are I ikely to be down about 2 percent from a year
earlier,and they may also be negative in the f rst quarter of 2016,3M said.
3M is relatively optimistic on Asia,forecasting organic sales growth in China and Japan in the low to mid single digits.Brazil's ecaamy remains weak and may take another year a lwo to recover,
Thulin said.
In October,3M announced plans to eliminate about 1,500jobs,or 1.7 percent of the company's total,in response to a slowing economy.
In recent years,3M has incurred more debt and funneled mwe money to shareholders through stock buybacks and dividends.Dividends for 2015 are expected to total 54 percent of earnings per
share,up from 37 percent in 2013.3M has increased its dividend for each of the past 57 years.
Shares lost$9.50 to$148.13.