For the quarter, 3M's net income was $1.09 billion, or $1.52 per share, down ever so slightly from the $1.11 billion, or $1.53 per share, for the third quarter of 2010. Analysts who followed the company had reached a consensus forecast of $1.61 per share, while sales for the quarter were up 9.6% to $7.53 billion.
Backing out the effects of currencies on 3M's six separate segments, all but one experienced increased sales, led by industrial and transportation, which grew by 15.1%. Safety, security, and protection services were up 14.1%, while health care increased by 10.9%. Consumer and office sales were up 4.6%, and electro and communications eked out a 1% gain. However, the aforementioned softness in LCD TVs resulted in a 14.1% sales decline in display and graphics. At the same time, all of the company's geographic regions checked in with improved year-over-year sales.
As CEO George W. Buckley noted:
The business environment remains challenging, as the economic softening that we experienced late in the second quarter continued into the third. While growth rates were good across much of our portfolio, LCD TV remained weak and momentum slowed in other parts of electronics following several quarters of very good growth. In addition, ongoing policy uncertainty and austerity are affecting growth in Western Europe...As is typical we are seeing the impact of these changes earlier than most as our customers decrease production in order to lower their inventories. Conversely, we should benefit more quickly when those markets recover.
At the same time, Buckley expressed concern regarding ongoing softness in the developed economies, with which the company is coping through the implementation of "aggressive cost management and operational discipline." Conversely, management will continue with investments in R&D, sales, and manufacturing in the more promising developing economies.
Given the softness, the company's earnings expectations for 2011 range of between $5.85 to $5.95 per share, compared with a prior anticipated range of $6.10 to $6.25 rendered in July. The company earned $5.63 per share in 2010. The expectation for core sales is for an increase of 3% to 4%, versus previous guidance of 6% to 7.5%.
I must admit to an inability to recall an earnings season quite as topsy-turvy as the one we're currently enduring. For instance, you know about 3M's softness, but while DuPont
My inclination regarding 3M is to simply monitor the company carefully -- certainly with help from My Watchlist -- until circumstances become more copasetic with our friends across the pond. Given a European Union meeting planned for Wednesday, improvements just might be in the offing.