Diversified U.S. manufacturer 3M missed Wall Street's earnings estimates and cut its 2013 profit forecast on Thursday, citing weakening demand for electronics products as well as foreign currency fluctuations.
After the earnings announcement, the company's shares ticked lower after the opening bell on Wall Street. (Click here to get the latest quotes.)
The lowered outlook came after first-quarter profit and revenue both missed Wall Street expectations.
3M, which makes a range of products from Post-It notes to films used in television screens, blamed falling sales in its consumer electronics segment.
The St. Paul, Minnesota company posted first-quarter earnings excluding items of $1.61 per share, up from $1.59 a share in the year-earlier period. Revenue increased 2 percent to $7.63 billion from $7.49 billion a year ago.
But the company fell short of Wall Street forecasts. Analysts had expected 3M to report earnings excluding items of $1.65 a share on $7.81 billion in revenue, according to a consensus estimate from Thomson Reuters.
Executives had expected weak demand for electronic insulation, computer touch screen materials as well as fluids used to make computer chips, but they said actual sales were worse than feared.
"We expected a challenging start to the year, but in fact market conditions were tougher than we had expected," Chief Executive Inge Thulin said on a conference call with investors.
3M now expects to earn $6.60 to $6.85 per share this year, a range mostly below the $6.82 average analyst estimate, according to Thomson Reuters I/B/E/S. The company previously had expected to earn $6.70 to $6.95 per share this year.
"Considering the stronger U.S. dollar and softer demand in some end markets, it is prudent to alter our outlook a bit for 2013," Thulin said.
The company saw sales growth across most of its major segments, with industrials rising 4.6 percent, health care up 2.8 percent and safety and graphics rising 2.2 percent. At the same time, 3M's electronics and energy segment sales tumbled 3.3 percent, largely on weak demand and currency fluctuations.
Analysts said 3M's 2012 purchase of ceramics maker Ceradyne likely weighed on margins.
The unit makes parts for the semiconductor market, which has been weak in recent quarters, and bulletproof vests for the U.S. military, which is winding down overseas operations.
Thulin has said 3M needs to prune its broad portfolio of products, and likely to focus on fewer but larger takeovers.