3M earnings beat estimate, shares pop
3M Co (MMM.N: Quote, Profile, Research, Stock Buzz) reported a 10 percent rise in quarterly earnings on Tuesday, a pleasant surprise, sending shares as much as 7 percent higher compared with a decline in the broader market.
3M’s broad lineup of businesses — from high-tech industrial products such as chemicals used in aircraft maintenance to basic consumer goods like Post-It notes — make it a bellwether of the U.S. economy. With U.S. demand slowing, 3M has been relying on foreign markets for growth.
“They’re definitely benefiting from the fact that they make things that everybody needs,” said Sterne Agee analyst Nick Heymann, noting that international markets generated 62 percent of the company’s sales.
The company, which makes products ranging from Scotch tape to optical films for liquid crystal displays, posted third-quarter net income of $991 million, or $1.41 per share, compared with $960 million, or $1.32 per share, a year earlier.
Factoring out special items, the St payday advance lender. Paul, Minnesota-based company posted earnings of $1.42 per share, which compares with analysts’ estimates of $1.38 per share, according to Reuters Estimates.
Revenue rose 6.2 percent to $6.56 billion, a bit short of analysts’ estimates of $6.67 billion.
The company lowered its outlook slightly, predicting 2008 earnings in the range of $5.40 per share to $5.48 per share, an 8 percent to 10 percent increase, instead of the minimum 10 percent increase it had previously predicted. Analysts see 2008 EPS of $5.45, according to Reuters Estimates.
But even the reduction translated into a positive against reduced expectations, as the outlook was “far from the disaster many have come to expect,” wrote J.P. Morgan analyst C. Stephen Tusa Jr, who rates 3M shares “overweight.”