3M Co. reduced the top end of its 2015 profit forecast and cut the revenue outlook as sluggish international markets weigh on sales at the maker of Post-it Notes and safety equipment.
Earnings this year will be $7.80 to $8 a share, compared with the previously projected range of $7.80 to $8.10, 3M said Thursday. Organic local-currency sales growth will be 2.5 percent to 4 percent, down from a range of 3 percent to 6 percent. The shares fell to their lowest value since October.
“We are amending our growth outlook slightly to account for lower-than-expected global economic growth,” Chief Executive Officer Inge Thulin said in a statement. The effects of foreign currency exchange will reduce sales by as much as 7 percent this year, the company said.
Thulin has emphasized new product development and overseas expansion since becoming CEO in 2012, and 3M agreed last month to buy protective-gear maker Capital Safety for $2.5 billion. The St. Paul, Minnesota-based company earns about two-thirds of its revenue outside the U.S., leaving it vulnerable to a dollar that strengthened against many currencies in the first half of the year.
3M’s new annual outlook straddles analysts’ average profit estimate of $7.91.
The shares fell 3.8 percent to $149.50 at the close in New York, the biggest decrease since December 2013. 3M was the biggest decliner among the 30 companies in the Dow Jones Industrial Average.
Second-quarter profit of $2.02 a share exceeded the $2 average of 13 estimates compiled by Bloomberg. Revenue fell 5.5 percent to $7.69 billion, missing analysts’ average estimate of $7.82 billion.
Sales fell in all five of 3M’s business units, with the electronics and energy division down 7.9 percent. On a local-currency basis, organic revenue rose in four of the segments.
3M agreed to purchase Capital Safety, its largest-ever acquisition, to grow in fast-growing emerging markets where worker-protection regulations are increasing and multinational companies are expanding.
The deal followed the Feb. 23 accord to buy Polypore International Inc.’s filtration business for $1 billion.
The company said it paid shareholders $646 million in dividends during the second quarter and bought back $1.7 billion of stock.