3M Profit Beats Estimates on U.S. Auto-Supply Demand
3M Co. (MMM), the maker of Post-it Notes and fuel system tuneup kits, gained in U.S. trading after posting a first-quarter profit that beat analysts’ estimates because of rising domestic auto and industrial demand.
Net income climbed 4.1 percent to $1.13 billion, or $1.59 a share, 3M said today in a statement. Per-share results included a 4-cent charge for early retirements. Analysts projected earnings of $1.49, the average of 15 estimates compiled by Bloomberg.
The U.S. market drove sales at the industrial and transportation unit, the largest division at St. Paul, Minnesota-based 3M. Operating profit slumped 29 percent at the display and graphics business, which serves the manufacturers of liquid crystal display televisions with optical films.
“The fact that they were able to beat numbers with their technologies business seeing declines in operating income year over year is a good sign the rest of their businesses are operating pretty well,” Mark Demos, a portfolio manager at Fifth Third Asset Management in Minneapolis, said in a telephone interview. He helps oversee $18 billion including 3M shares.
3M gained 1.6 percent to $88.49 at the close in New York. That pushed the stock’s year-to-date advance to 8.3 percent.
The company also raised the low end of its 2012 profit forecast, saying earnings would be in a range of $6.35 to $6.50 a share, from a previous floor of $6.25.
U.S. Sales Rise
Sales rose 2.4 percent to $7.49 billion. That exceeded the average estimate of $7.44 billion, based on eight analysts’ predictions compiled by Bloomberg. The U.S. saw a 6.3 percent increase. That helped make up for a 1.9 percent drop in the Asia-Pacific region and a 0.1 percent rise in Europe, Middle East and Africa.
The industrial and transportation unit posted sales of $2.66 billion, an 8.6 percent increase, while sales rose 5.6 percent to $981 million at the safety and security business. Revenue from the display and graphics division fell 12 percent to $832 million. Sales dropped 3.3 percent to $808 million at the electronics and communications unit.
Chief Executive Officer Inge Thulin, 58, said in a Feb. 8 interview he plans to maintain the company’s current strategy of growth through emerging-market expansion and spending on research. He succeeded George Buckley, who had served as CEO since December 2005 and reached the company’s mandatory retirement age of 65.
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