NEW YORK (AP) — Americans put the brakes on purchases of LCD TVs and other electronics this summer, leaving manufacturers like 3M Co. — which relies on those expensive goods to drive its business — in the dark.
The manufacturing conglomerate on Tuesday lowered its earnings expectations for the year on slowing imports from overseas. About 70 percent of the company’s sales are outside of the U.S.
3M shares sank 5.7 percent, or $4.65 to $77.53 in afternoon trading.
The Maplewood, Minn., company now expects to earn $5.85 to $5.95 per share compared with $6.10 to $6.25 per share previously. Core sales are expected to grow by 3 to 4 percent, compared with a previous forecast of 6 to 7.5 percent growth.
3M issued the outlook as it reported third-quarter earnings fell about 2 percent to $1.09 billion, or $1.52 per share, from $1.11 billion, or $1.53 per share, a year earlier.
Revenue rose 10 percent to $7.53 billion. Most of that increase was driven by acquisitions and gains in foreign exchange.
Analysts expected $1.61 per share on revenue of $7.78 billion, on average.
3M said a number of its customers reduced inventories during the quarter, expecting slowing demand.
Revenue in the company’s industrial and transportation unit — its biggest segment — grew by double-digits, as did sales in safety, security and protection services and health care.
The 3M unit most familiar to many people — consumer and office — posted a 4.6 percent revenue increase. That unit makes Post-its and Scotch tape as well as a number of other office products. Electro and communications revenue rose just 1 percent and display and graphics sales fell 14 percent because of weakness in the LCD TV market. The electro and communications unit makes everything from police tape to static control products.
In a note to clients, Sterne Agee analyst Ben Elias cut his rating on the stock to “Neutral” from “Buy,” because of slowing growth in its core business and lower global growth predictions. Besides economic concerns, Elias said he now has less confidence in the company’s ability to outperform its peers “with no visible backlog or order rates, a crisis of consumer confidence and a display and graphics segment that faces ongoing downward pressure.”
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