Total sales grew 15.8% in Safety and Graphics, 6.8% in Industrial, 4.9% in Health Care, 4.6% in Consumer, and 3.6% in Electronics and Energy. Organic local-currency sales increased 8.5% in Safety and Graphics, 5.7% in Industrial, 5.2% in Electronics and Energy, 4.3% in Consumer, and 3.8% in Health Care.
On a geographic basis, total sales grew 9.5% in EMEA (Europe, Middle East and Africa), 7.9% in Asia Pacific, 7.1% in the U.S., and 3.1% in Latin America/Canada. Organic local-currency sales increased 6.0% in Latin America/Canada, 5.8% in EMEA, 5.6% in the U.S, and 5.5% in Asia Pacific.
“3M had a strong quarter, including organic growth of 6% that was broad-based across all business groups and geographic areas,” said 3M CEO Mike Roman. “Our team delivered record sales and a double-digit increase in earnings per share, while keeping our commitment to investing in our business and returning cash to shareholders.”
Second-quarter GAAP earnings were $3.07 per share, an increase of 19% versus the second quarter of 2017. During the quarter, the company recorded a benefit of $0.48 per share related to the divestiture of the communication markets business, net of related restructuring actions. Second-quarter 2017 GAAP earnings were $2.58 per share which included a net benefit of $0.33 per share from the identity management business divestiture gain, partially offset by portfolio and footprint investments.
Second-quarter operating income was $2.4 billion with operating margins of 28.6%. Operating income includes a benefit of $389 million from the communication markets business divestiture, net of related restructuring actions.
3M updated its 2018 GAAP earnings expectations to reflect the full-year impact from the communication markets business divestiture and related actions. The company now expects its GAAP earnings to be in the range of $9.08 to $9.38 per share versus $8.68 to $9.03 previously.
The company maintained its full-year organic local-currency sales growth guidance of 3% to 4% and free cash flow conversion of 90% to 100%.
Industrial Sales were $3.1 billion, up 6.8%. Sales increased in all businesses led by separation and purification, advanced materials, abrasives and industrial adhesives and tapes. Operating income was $724 million, an increase of 27.4% year-on-year; operating margins were 23.0%.
Safety and Graphics sales were $1.8 billion, up 15.8%. Sales increased in all businesses, led by personal safety, commercial solutions, and transportation safety. Operating income was $480 million, down 43.6% year-on-year; Q2 2017 operating income included the identity management divestiture gain of $457 million; operating margins were 26.4%.
Health Care sales were $1.5 billion, up 4.9%. Sales growth was led by food safety, medical solutions, and health information systems; drug delivery declined. Operating income was $435 million, an increase of 6.7% year-on-year; operating margins were 28.6%.
Electronics and Energy sales were $1.3 billion, up 3.6%. Energy-related sales grew by 9%; electronics-related sales increased 4% with growth in both electronics materials solutions, and display materials and systems. Operating income was $865 million, an increase of 167% year-on-year, reflecting a benefit of $494 million from the communication markets divestiture gain; operating margins were 64.7%.
Consumer sales were $1.2 billion, up 4.6%. Sales grew in home improvement, stationery and office, and home care; consumer health care declined. Operating income was $261 million, up 32.3% year-on-year; operating margins were 21.4%.