By Austen Hufford and Patrick Thomas 

3M Co. posted lower quarterly sales and cut its profit expectations for the year, saying weakness in China and key industries have lowered demand, the latest global manufacturer to be hit by a slowing global economy.

The maker of everything from Post-it Notes to molar crowns on Thursday said revenue fell in about one-third of its markets. Revenue excluding currency fluctuations and acquisitions declined 1.3%, including a 9.4% drop in China.

The company said its business serving car makers and electronics companies was also soft in its third quarter.

Shares of the company fell 4.8% in midday trading, dragging down the Dow Jones Industrial Average.

"The macroeconomic environment remains challenging," Chief Executive Mike Roman told analysts on a call Thursday. "We're still anticipating that slowing in China, automotive and electronics could continue," he said.

3M, which sells to both consumers and industrial customers, has been particularly hurt by declining rates of global car production. The company said its business to car makers was down 3% in the quarter and was in-line with declines of global car and light-truck production, but worse than what the company had originally expected.

The strike by unionized workers at General Motors Co. factories has hurt car production, but the impact on 3M's results was limited as the continued stoppage started near the end of its quarter.

The declines in the company's industrial business was partially offset by growth in its health-care business, which has been a focus in recent years. This month the company completed its $4.3 billion acquisition of wound-care company Acelity Inc.

3M expects adjusted earnings to be between $8.99 and $9.09 this year, down from its previous range of $9.25 to $9.75 a share, after excluding certain one-time charges. The Acelity deal lowered the new range by 15 cents.

Total revenue fell to $7.99 billion in its latest quarter from $8.15 billion a year earlier. Analysts had expected $8.17 billion of revenue in the quarter, according to FactSet.

The St. Paul, Minnesota-based manufacturing conglomerate reported a profit of $1.58 billion, or $2.72 a share, compared with $1.54 billion, or $2.58 a share, a year ago. The company's earnings included a 14-cent gain from the divestiture of its gas and flame detection business. Analysts polled by FactSet were expecting earnings of $2.51 a share.

Sales in some of the company's divisions, including health care and consumer products rose during the quarter. Health-care revenue grew by 4.7% in the second quarter. Consumer products revenue rose nearly 2%.

Safety and industrial sales fell nearly 6% to $2.8 billion for the quarter and in its transportation and electronics business declined 4.4%.

Write to Austen Hufford at austen.hufford@wsj.com and Patrick Thomas at Patrick.Thomas@wsj.com

 

(END) Dow Jones Newswires

October 24, 2019 12:44 ET (16:44 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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