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Last Update: 25-Oct-11 10:01 ET
3M Misses Third Quarter Earnings Expectations; Lowers Fiscal Year 2011 Guidance
3M (MMM $77.33 -4.85) reported third quarter earnings of $1.52 per share, $0.09 worse than the Capital IQ Consensus Estimate of $1.61.
Revenues rose 9.6% year/year to $7.53 billion versus the $7.76 billion consensus.
For fiscal year 2011, the company lowered earnings expectations to $5.85 to $5.95 per share from $6.10 to $6.25 versus $6.17 Capital IQ Consensus Estimate, including a $0.22 increase in [ension/postretirement benefit exp. 3M also expects FY organic sales volume growth of 3 to 4% vs. a prior expected range of 6 to 7.5%.
The company now expects that currency effects will add 3 to 3.5 percent to sales for the year and acquisitions will add another 3 to 3.5 percent. Third-quarter worldwide sales growth was 9.6%, of which 3.7% came from acquisitions, 3.1% from foreign exchange impacts, 1.9% from organic volume growth and 0.9% from higher year-on-year selling prices. Organic volume growth was below recent trend levels, reflecting weakness across the electronics market along with generally slowing economic growth in the developed world.
3M also noted that a number of its customers reduced inventories during the quarter in anticipation of slowing demand. Excluding the positive impact of currency, five of the company's six business segments expanded sales in the quarter, with Industrial and Transportation up 15.1%, Safety, Security and Protection Services up 14.1%, Health Care up 10.9%, Consumer and Office up 4.6% and Electro and Communications up 1.0%. Local-currency sales in Display and Graphics declined 14.1%, largely due to end-market weakness and lower attachment rates in LCD TVs. The company reported year-on-year sales increases in all geographic regions. Sales in local currencies grew 11.2% in Latin America/Canada, 9.2% in the U.S., 5.9% in Europe and 2.1% in Asia Pacific. Excluding optical, Asia Pacific sales increased 11.3% in local currencies.
Revenues rose 9.6% year/year to $7.53 billion versus the $7.76 billion consensus.
For fiscal year 2011, the company lowered earnings expectations to $5.85 to $5.95 per share from $6.10 to $6.25 versus $6.17 Capital IQ Consensus Estimate, including a $0.22 increase in [ension/postretirement benefit exp. 3M also expects FY organic sales volume growth of 3 to 4% vs. a prior expected range of 6 to 7.5%.
The company now expects that currency effects will add 3 to 3.5 percent to sales for the year and acquisitions will add another 3 to 3.5 percent. Third-quarter worldwide sales growth was 9.6%, of which 3.7% came from acquisitions, 3.1% from foreign exchange impacts, 1.9% from organic volume growth and 0.9% from higher year-on-year selling prices. Organic volume growth was below recent trend levels, reflecting weakness across the electronics market along with generally slowing economic growth in the developed world.
3M also noted that a number of its customers reduced inventories during the quarter in anticipation of slowing demand. Excluding the positive impact of currency, five of the company's six business segments expanded sales in the quarter, with Industrial and Transportation up 15.1%, Safety, Security and Protection Services up 14.1%, Health Care up 10.9%, Consumer and Office up 4.6% and Electro and Communications up 1.0%. Local-currency sales in Display and Graphics declined 14.1%, largely due to end-market weakness and lower attachment rates in LCD TVs. The company reported year-on-year sales increases in all geographic regions. Sales in local currencies grew 11.2% in Latin America/Canada, 9.2% in the U.S., 5.9% in Europe and 2.1% in Asia Pacific. Excluding optical, Asia Pacific sales increased 11.3% in local currencies.
