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3M posts its higher 2Q net
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July 29, 1999: 9:24 a.m. ET
Growth in Asia mutes effects of softness in Europe, Latin America
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NEW YORK (CNNfn) - Minnesota Mining & Manufacturing Co., still struggling with negative currency effects, nevertheless showed improvement in its second-quarter results reported Thursday, beating analysts' estimates by 3 cents a share.
The diversified manufacturer -- known for its Scotch Tape and Post-It Notes -- credited its better earnings on solid business growth in the Asia Pacific region, a strong performance by its new products worldwide, and improvements in the costs of goods sold.
Excluding one-time items, 3M posted second-quarter income of $421 million, or $1.03 per diluted share, compared with net income of $386 million, or 94 cents a share, a year earlier. The company was expected to earn $1.00 per share, according to a consensus of analysts compiled by forecast-tracking firm First Call.
Including gains from the divestiture of two businesses, net income in the latest quarter rose to $476 million, or $1.17 a diluted share.
Sales for the quarter grew 2.5 percent to $3.86 billion.
In addition to 11 percent growth in its Asia Pacific volume, 3M said it posted solid gains in its consumer, telecommunications, automotive and other product lines in the United States. But growth was curbed by lower sales of pharmaceuticals and market softness in visual systems and certain industrial products.
In Europe and Latin America, 3M unit sales continued to be affected by economic softness in the regions.
The company noted that currency effects reduced earnings for the quarter by 2 cents a share, and cut into sales by about 1.5 percent.
First half shows improvement
Year to date, the company reported net income of $860 million, or $2.12 per diluted share, including one-time items. That represents an increase from the $786 million, or $1.92 per share, reported for the the first six months of 1998.
Sales rose 2 percent to $7.64 billion.
The quarterly results put 3M in a good position to maintain its momentum going forward, the company said.
"Our results for the first six months were on plan, and we have good momentum entering the second half of the year," L. D. DeSimone, chairman and chief executive officer, said in a statement. "We expect continued solid earnings growth, led by new products and ongoing productivity improvement."
Shares in 3M (MMM) rose ¼ to close at 89-1/8 on Wednesday.
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