3M's Profit Rises on Stronger Margins, Tax Benefit

3M Co. said its first-quarter earnings rose 6.3% on stronger margins and a boost from a tax benefit.

Meanwhile, lower sales in the manufacturing giant's industrial and electronics segments offset growth in its other businesses.

Sales at the St. Paul, Minn.-based company have weakened in recent quarters amid slowing demand in some markets, including materials used in consumer electronics, such as adhesives and films that go into screens for computers, tablets and phones.

The maker of products including Post-it Notes, dental implants and sandpaper aims to mitigate the effect of modest sales growth in coming years by reducing costs and developing new products out of its consumer brands and industrial materials.

In the latest quarter, electronics and energy segment sales fell 14% to $1.14 billion. On an organic basis, the decline was 13%, driven mostly by weaker electronics-related sales, which dropped 18%.

Industrial segment sales dropped 3% to $2.58 billion. On an organic basis, the decline was 1.9%.

Over all, 3M reported a profit of $1.28 billion, or $2.05 a share, up from $1.2 billion, or $1.85 a share, a year earlier. The latest period included a tax benefit of 10 cents a share related to the company's early adoption of some new accounting standards.

Revenue decreased 2.2% to $7.41 billion. Organic sales—which exclude items such as currency impacts—edged down 0.8%.

Analysts polled by Thomson Reuters expected per-share profit of $1.92 and revenue of $7.33 billion.

Operating margin rose to 24.1% from 22.8%.

3M also affirmed its 2016 outlook.

Shares of 3M, up 16% over the past three months, fell 0.8% to $167.10 in premarket trading.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

April 26, 2016 09:15 ET (13:15 GMT)

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