(Reuters) - 3M Co’s quarterly profit beat estimates on Thursday as the company’s efforts to bolster its healthcare business helped it counter sluggish demand in its traditional industrial and transportation units due to a slowdown in China.
Revenue fell at all but the diversified manufacturer’s healthcare unit, where it rose about 6% on strength in both domestic and international markets.
The company’s healthcare unit sells everything from surgical tapes to sterilization products and accounted for about 22% of its total revenue in the quarter. 3M bought surgical wound-care company Acelity Inc in May to expand its medical dressings products.
The Post-It maker said the healthcare business is now expected to grow at the high end of its 2% to 4% forecast range.
“We talked about (healthcare) having a good quarter, and behind that is strong market growth,” Chief Executive Officer Mike Roman said.
Total revenue fell 2.6% to $8.17 billion as the company continues to struggle with lower demand in the high-growth China automotive and electronics sectors. Sales in Asia-Pacific, 3M’s biggest market outside the United States, fell 3.5%.
The company also booked a charge related to the restructuring of its Venezuela operations that pushed down profit by 39% to $1.13 billion, or $1.92 per share, in the second quarter ended June 30.
Excluding items, it earned $2.20 per share. Analysts were expecting $2.05 per share, according to IBES data from Refinitiv.
3M also reiterated its 2019 adjusted profit forecast to be between $9.25 to $9.75 per share.
3M’s beat and reaffirmation of 2019 outlook were likely viewed positively by the market, after many analysts had called out 3M as a top short heading into the quarter, due to weakness in some of its key markets, Gordon Haskett analyst John Inch said.
Shares of the company erased earlier gains and were down 0.7% to $178 in afternoon trading. The broader Nasdaq index was also down about 1% at 12:57 pm ET.
Reporting by Rachit Vats and Ankit Ajmera in Bengaluru; Editing by Arun Koyyur and Anil D'Silva