3M calls growth in U.S. and Europe 'uninspiring'
Go Deeper.
Create an account or log in to save stories.
Like this?
Thanks for liking this story! We have added it to a list of your favorite stories.
By SAMANTHA BOMKAMP, AP Business Writer
NEW YORK (AP) - 3M Co. said Thursday that growth in the U.S. and Western Europe is "uninspiring," and it continues to shift more of its business to faster moving emerging markets.
3M also said it doesn't seeing signs of a broad double-dip recession.
"More than a year ago we forecast economic growth would slow in 2010 in some of our markets," CEO George Buckley said in a conference call. "Some folks disagreed with us, thinking that perhaps we were being too conservative. But I think things have played out largely the way we anticipated and the trend is no longer a surprise."
Turn Up Your Support
MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all.
The St. Paul, Minn., manufacturer still predicts a long recovery for U.S. commercial construction, but it said automotive markets are getting stronger.
Shares lost $4.99, or 5.5 percent, at $85.38 in morning trading.
3M is considered a key indicator of broader economic health because it makes everything from Post-Its to respirators. 3M also produces over 1,000 products for cars and roads; including abrasives and paint finishings, all-weather pavement markings and sheeting for reflective signs.
3M is expanding its products in law enforcement and technology through acquisitions. It agreed in August to pay $230 million for an Israeli company that makes tracking devices. In the same month it said it would pay $943 million for Cogent Inc., which develops systems that read finger and palm prints, and iris and face recognition systems.
The company said those acquisitions will weigh on its full-year earnings. For all of 2010, 3M now expects to earn $5.59 to $5.63 per share. It previously forecast $5.54 to $5.69 per share. Taking out charges for new health care regulations, 3M forecast earnings of $5.70 to $5.74 per share, compared with $5.65 to $5.80 previously.
Analysts, who usually take out one-time items from their estimates, expect a profit of $5.80 per share.
3M thinks revenue will grow about 14 percent from last year.
Emerging markets now account for a third of 3M's total sales. The company is also benefiting from booming sales of communications and electronics products. That combination drove third-quarter earnings up 16 percent.
3M company earned $1.11 billion, or $1.53 per share, compared with year-ago earnings of $957 million, or $1.35 per share.
Revenue rose 11 percent to $6.87 billion. Thomson Reuters says analysts forecast net income of $1.51 per share on revenue of $6.83 billion.
3M grew sales by double digits in four of six business segments. Revenue in its Electro and Communications unit grew 25 percent and Display and Graphics revenue rose 19 percent. By region, sales in Asia Pacific rose the fastest, improving 28 percent from last year's third quarter.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
