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3M (MMM) Reports Plain Oatmeal Q2 Results; LCD Constraints Linger

July 26, 2011 10:49 AM EDT
3M (NYSE: MMM) shares are showing weakness Tuesday following relatively in-line second-quarter results, as well as tightened guidance.

Sales in the quarter rose 14.1 percent to $7.68 billion, edging-out views calling for $7.6 billion.

Net income bumped up 3.5 percent, from $1.121 to $1.160 billion, or $1.60 per diluted share. The number was right inline with the Street consensus.

"We posted record second-quarter sales and earnings per share and generated significant free cash flow in the quarter, and we did so in the face of some sizable headwinds," CEO George Buckley said. "...a larger-than-anticipated contraction in LCD TV end-market demand affected our sales, reflecting a tighter consumer electronics market as OEMs work to reduce channel inventories and lower their unit costs."

Sales growth was led by the Transportation and Safety, Security and Protection segments, growing 17.5 and 12.4 percent, respectively.

Looking ahead, 3M lifted the lower portion of its fiscal 2011 EPS outlook from a range of $6.05 - $6.25 to $6.10 - $6.25. Excluding pension costs, that range jumps to $6.32 - $6.47, beating views calling for $6.29. For the full year 2011, 3M estimates the Japan earthquake will reduce sales growth by approximately one percentage point, operating margins by 30 basis points and earnings by $0.11 to $0.12 per share.

3M is over 4 percent lower Tuesday; the stock last traded at $91.07.


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