3M Boosts Profit Forecast as Earnings Beat Estimates
George Buckley, chief executive officer of 3M Co. Photographer: Tim Boyle/Bloomberg
3M Co., the maker of stethoscopes and sandpaper, raised its full-year forecast and posted second- quarter profit that beat analysts’ estimates as sales climbed at all divisions for the third straight quarter.
Profit excluding Medicare-related charges will be as much as $5.80 a share this year, up from a maximum of $5.60 forecast in April, the St. Paul, Minnesota-based company said today in a statement. Analysts had predicted $5.64, the average of 16 estimates compiled by Bloomberg.
Chief Executive Officer George Buckley has boosted sales by expanding into emerging markets, where revenue increased 38 percent in the second quarter. 3M, an economic bellwether because of its product range spanning the automotive, consumer and health-care markets, has introduced new products in the past 12 months for 3-D technology and solar mirror panels.
“It was not an intergalactic blow-away, but it was really solid,” Nick Heymann, a New York-based analyst with Sterne Agee & Leach Inc., said today in an interview. “Their strategy of taking share in emerging markets is definitely working.”
Operating Margins
3M rose $1.60 to $83.90 at 9:11 a.m. in pre-market trading. The shares increased 11 cents to $82.30 yesterday in New York Stock Exchange composite trading and had fallen less than 1 percent this year before today.
Second-quarter net income increased 43 percent to $1.12 billion, or $1.54 a share, from $783 million, or $1.12, a year earlier. Analysts, on average, projected profit of $1.47 a share. Sales climbed 18 percent to $6.73 billion.
Sales at the electro and communications division climbed 32 percent to $726 million, the biggest increase of any unit. Revenue at the display and graphics division rose 30 percent to $1.05 billion, driven by sales of films used on LED back-lit televisions.
The company boosted its forecast for sales volumes from existing businesses to grow as much as 15 percent from as much as 12 percent.
All six of 3M’s units posted operating margins of 22 percent or higher. 3M said its full-year operating income margins will exceed 22 percent.
To contact the reporter on this story: Will Daley in New York at wdaley2@bloomberg.net
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