Amid an economy that clearly hasn't totally emerged from its doldrums, Minnesota-based 3M
3M, which turns out a number of products used worldwide, earned $1.08 billion, or $1.49 per share, for the quarter, up from $939 million, or $1.29 per share, in the first quarter of 2010. The per-share line beat the $1.44 per share consensus among analysts. Revenue for the quarter rose 15% to $7.31 billion, versus an average estimate of $6.95 billion.
Despite the old notion that "consistency is the hobgoblin of small minds," 3M has impressed us with it ability to generate sales increases from all six of its operating sectors, in addition to its 15.6% average revenue improvement over the past five quarters. Its biggest unit, industrial and transportation, reached a top line of $2.5 billion, 16.9% higher in local currency than a year ago. The sector manufactures a wide array of products, including abrasives and paint finishings, which frequently find their way into automotive and consumer electronics products. The most robust increase was turned in by electro and communications, where sales of $836 million were up 17.1%.
But lest you assume that the U.S. is leading 3M's steady growth, in reality the sales improvement was 30% in India, 27% in China/Hong Kong, and 25% in Brazil. Those rates compare to 10.2% for the United States.
As you'd expect, CEO George W. Buckley was hardly chagrined by his company's initial quarterly results for the year: "We are off to a tremendous start in 2011 with [quarterly] organic sales up 9%, or 10.5%, adjusting for Japan and H1N1 [swine flu] impacts." He went on:
New product flow is accelerating, boosted by higher investment in laboratory, sales and marketing manufacturing capacity. In addition, we were able to more than overcome the impact of the terrible earthquake in Japan and its tragic aftermath in the tsunami and nuclear power plant issues … Our hearts go out to [3M's Japanese team] and to their nation.
Looking ahead to the remainder of 2011, management expects per-share profits to fall between $6.27 and $6.47.
3M is generally included among the "bellwether" companies, given its role as an indicator of overall economic vitality. Later this week, other such members of the bellwether group like Dow Chemical and Caterpillar will further illuminate the state of the economy by telling us about their quarters.
In the meantime, given 3M's across-the-board solid quarter, I'm adding the company to My Watchlist, our free stock monitoring service. Care to join me?