3M Reports Record Earnings But Lowers Outlook
3M Company, Inc., on Tuesday reported record third-quarter earnings coupled with a modest decline in revenue—and it lowered its full-year earnings outlook due to “current economic realities.”
The Maplewood-based company said that its net income totaled $1.16 billion, or $1.65 per share, for the quarter that ended September 30, up 8.6 percent from the same period in 2011. 3M’s earnings met the expectations of analysts polled by Thomson Reuters.
Revenue, meanwhile, totaled $7.5 billion, down 0.4 percent from the third quarter of 2011 and just shy of the $7.63 billion that analysts had anticipated.
“The 3M team delivered another strong operating performance in the third quarter,” 3M Chairman, President, and CEO Inge Thulin said in a statement. “In the face of the current slow-growth economy, our businesses continued to grow organically and generated record profitability. All six of our businesses posted 21 percent-plus operating margins in the quarter, so we continue to execute well in 2012.”
But despite record third-quarter earnings—which were driven in part by sales growth in the automotive and aerospace markets—3M lowered its expectations for the full year: The company said that, “reflecting current economic realities,” it expects 2012 earnings to be in the range of $6.27 to $6.35 per share, down from the previously expected $6.35 to $6.50 per share.
The company attributed its lowered outlook in part to changing currency exchange rates and acquisition costs. Amid regulatory concerns, the company recently terminated its planned $550 million acquisition of Avery Dennison Corporation’s office supply operations. But the company said earlier this month that it intends to pay $860 million to acquire Ceradyne, Inc., a Costa Mesa, California-based company that makes high-tech ceramics. In September, the company completed a $110 million acquisition of the business of Federal Signal Technologies Group.
“Regardless of economic conditions, we will remain focused on things within our control,” Thulin said. “3M’s unique combination of technology strength, manufacturing excellence, and global capability will enable us to deliver sustainable increases in sales, earnings, and cash flow.”
3M is among Minnesota’s five largest public companies based on revenue, which totaled $29.6 billion in 2011. Earlier this month, the company restructured its business units. Shares of the company’s stock were trading down 3.4 percent at $89.41 mid-Tuesday morning.