Industrial segment’s performance in Q3 2018
With a third-quarter revenue share of 37.1%, 3M’s (MMM) Industrial segment is the company’s most significant revenue contributor. The segment’s revenue share rose 10 basis points year-over-year. The segment reported revenues of $3.02 billion in the third quarter, which is flat year-over-year.
The Industrial segment’s revenue growth was supported by the increase in volumes and prices, which helped its revenues rise 2.2%. The unfavorable foreign currency translations due to the strong dollar had a negative impact on its revenues of 2.1%. Divestitures reduced its sales by 0.1%, and the segment’s revenues remained flat.
With the exception of its automotive aftermarket business, sales increased across all of the segment’s businesses. Its sales growth was led by advanced materials, automotive and aerospace solutions, and industrial adhesives and tapes. This revenue growth was driven by the Asia-Pacific region with 3.0% and the United States region with 2.0%. Its EMEA (Europe, the Middle East, and Africa) and Latin America/Canada regions grew by 1.0% each.
Industrial segment’s operating income and margin
The Industrial segment reported operating income of $667.0 million in the third quarter compared to $672.0 million in the third quarter of 2017, a decline of 0.7% year-over-year. The segment reported an operating profit margin of 22.1% in the third quarter compared to 22.2% in the third quarter of 2017, a decrease of 10 basis points year-over-year. The segment’s operating income and margin decreased due to portfolio and footprint action.
Investors looking for broad-based exposure to 3M can consider the iShares MSCI USA ESG Select ETF (SUSA), which invests 3.6% of its portfolio in MMM. The fund’s other holdings include Microsoft (MSFT), Apple (AAPL), and Caterpillar (CAT), which had respective weights of 5.4%, 5.0%, and 1.3% on October 24.