3M (NYSE: MMM) today reported second-quarter earnings of $1.71 per share, an increase of 3.0 percent versus the second quarter of 2012. Sales grew 2.9 percent year-on-year to a record $7.8 billion. Organic local-currency sales grew 2.3 percent and acquisitions added 1.9 percent to sales. Currency impacts reduced sales by 1.3 percent year-on-year.
Operating income was $1.7 billion and operating income margins for the quarter were 22.0 percent. Second-quarter net income was $1.2 billion and free cash flow was $1.3 billion.
The company paid $436 million in cash dividends to shareholders and repurchased $1.2 billion of its own shares during the quarter.
Organic local-currency sales growth was 5.7 percent in Health Care, 3.3 percent in Industrial, 2.9 percent in Consumer and 2.0 percent in Safety and Graphics; Electronics and Energy declined 2.1 percent year-on-year. On a geographic basis, organic local-currency sales grew 8.5 percent in Latin America/Canada, 2.2 percent in Asia Pacific, 1.9 percent in EMEA (Europe, Middle East and Africa) and 0.8 percent in the U.S.
“This was a good quarter for 3M, with strong performances across the portfolio,” said Inge G. Thulin, 3M’s chairman, president and chief executive officer. “Four of our five business segments achieved positive organic growth and posted operating margins above 21 percent. We converted 107 percent of net income to free cash flow in the quarter, which fueled ongoing investment in the business and allowed for significant cash returned to shareholders. Our employees executed well in the face of continued slow economic growth.”
3M reiterated its 2013 full-year performance expectations. The company anticipates 2013 earnings to be in the range of $6.60 to $6.85 per share with organic local-currency sales growth of 2 to 5 percent. 3M continues to expect free cash flow conversion will be in the range of 90 to 100 percent.
In addition, the company now expects full-year gross share repurchases will be in the range of $3.5 billion to $4.5 billion versus a previous range of $2 billion to $3 billion.