Mixed conditions have led St. Paul, MN-based 3M (NYSE: MMM) to lower its outlook for the remainder of the year. Organic growth expectations were lowered to 0 percent to 1 percent from 1 percent to 3 percent, following the company's second-quarter earnings report.
"Each of our businesses is facing slightly different market realities," President and CEO Inge Thulin told investors on a call to discuss the second-quarter results. "Yet all of them are executing very well."
Four of the diversified manufacturer's five business groups posted gains "in line with our expectations entering the year," Thulin said.
The exception was electronics and energy, which saw organic sales fall 9.1 percent in the quarter, primarily due to lower demand for electronics. The poor performance in this segment was the key driver for the lowered outlook.
3M has taken action "to better position the business going forward," CFO Nicholas Gangestad said, but expectations are still for high single-digit declines in 2016.
The electronics market has been shifting for a few years, "so it's not a surprise for us," Thulin said. And with the other four business groups performing solidly, "I hope that we don't need to take drastic action in those."
