3M Jumps Most in Eight Years as Sales Strength Bolsters Outlook

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  • Company posts higher revenue across product portfolio, regions
  • Earnings surpassed highest analyst estimate in third quarter

3M Co. soared the most in eight years as across-the-board sales growth prompted the maker of Post-it notes and touchscreen components to raise its profit forecast.

The company increased revenue in all of its business units in the third quarter, led by a 13 percent jump in electronics and energy. Boosted by gains in emerging markets and a U.S. dollar turning in its favor, sales climbed in every geographic region, the company said in a statement Tuesday.

“3M seems to be executing on pretty much everything we can measure,” Scott Davis, an analyst with Melius Research, said in a note.

The results underscored 3M’s rebound from sluggishness in the electronics and office-supplies markets, which dented investors’ confidence three months ago. The St. Paul, Minnesota-based company generates two-thirds of its sales overseas, putting 3M in a position to gain when the dollar weakens against other currencies, as it has this year.

The shares advanced 7.6 percent to $238.36 at 1:39 p.m. in New York, after rising as much as 7.8 percent for the biggest intraday gain since March 2009. 3M climbed 24 percent this year through Monday, topping the 14 percent gain of a Standard & Poor’s index of industrial companies.

Adjusted earnings will be $9 to $9.10 a share this year, the company said, ahead of the $8.97 average of analysts’ estimates compiled by Bloomberg. The previous forecast was $8.80 to $9.05. 3M also raised the low end of its organic sales growth projection.

“Coming off a strong first half, our team delivered an even more robust performance in the third quarter,” Chief Executive Officer Inge Thulin said on a conference call with analysts.

Third-quarter earnings climbed to $2.33 a share, exceeding even the highest projection from analysts. Sales gained 6 percent to $8.17 billion. Foreign currency translation increased revenue by 0.6 percent, 3M said.

Excluding the effects of acquisitions and divestitures, local-currency revenue “was the highest the company has achieved since” the first quarter of 2011, Deane Dray, an analyst at RBC Capital Markets, said in a note.

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