WRAPUP 2-Flu drives face mask sales at 3M, Kimberly-Clark

Thu Oct 22, 2009 12:34pm EDT

* 3M and Kimberly-Clark profit, revenue top expectations

* Both companies cite strong sales of N95 respirator masks

* Both raise 2009 profit forecasts

* 3M says running mask factories nonstop since May

* 3M shares up 2.8 pct, Kimberly-Clark jumps 6 pct

By Jessica Wohl

CHICAGO, Oct 22 (Reuters) - A run on face masks to protect against the flu lifted profits at 3M Co (MMM.N) and Kimberly-Clark Corp (KMB.N), and both said demand remains strong as concern over the H1N1 pandemic rises.

The companies, which make face masks along with a wide variety of other products, said on Thursday that flu-related business drove increased sales of masks in the latest quarter.

Shares of 3M rose 2.8 percent, while Kimberly-Clark shot up 6 percent after both companies also raised their full-year forecasts.

Kimberly-Clark and 3M saw demand increase earlier in the year for masks called N95 respirators as concerns about the H1N1 flu spread. Pregnant women and children, as well as adults with underlying health conditions such as asthma, are said to be most vulnerable to H1N1, also known as swine flu.

An N95 respirator covers the nose and mouth tightly, filtering out tiny particles that can carry viruses and bacteria. It is different from a surgical mask, a loose covering that lets air in at the sides and is used to protect patients from the people treating them.

The U.S. Centers for Disease Control and Prevention has recommended that healthcare workers wear N95 masks to protect themselves when treating patients suspected of having H1N1. The Institute of Medicine agreed in a September report. [ID:nN03145590]

Kimberly-Clark has been working with hospitals for months to help plan for their anticipated need, Chairman and Chief Executive Thomas Falk said on a conference call.

"Everyone's sort of fighting their way through this," Falk said. "They all say the swine flu has spread faster and farther than maybe it was anticipated."

"Our guess is it will carry into early 2010 ... but probably begin to wane as we get into the latter part of the first quarter," he said.

RUNNING FACTORIES 24/7

It is already very difficult for patients to find H1N1 vaccines, which made their debut earlier this month. [ID:nN21504108]

H1N1-related demand for masks helped lift 3M sales by between $80 million and $100 million in the third quarter. Total revenue declined 5.6 percent to $6.2 billion. [ID:nN22533796]

The diversified manufacturer said it has been running its factories that make respiratory masks 24 hours a day, seven days a week since May, and still has not made progress on backlogs.

Kimberly-Clark said stepped-up demand for its masks accounted for about 40 percent of the 18 percent volume jump in its healthcare business.

The healthcare unit, which also makes items such as sterile gloves, was the company's only segment to post sales growth in the quarter. [ID:nN22484378] Kimberly-Clark also said that exam gloves had their sixth consecutive quarter of double-digit growth.

Manufacturers of hand sanitizers or cleansers, like Ecolab Inc (ECL.N), are also expected to report a lift from flu-related sales when they issue quarterly results in the coming weeks. [ID:nN20432363]

Other makers of N95s include Cardinal Health Inc (CAH.N) and Alpha Pro Tech (APT.A), whose shares were up 0.7 percent and 1.8 percent, respectively. (Additional reporting by James Kelleher in Chicago and Maggie Fox in Washington; Editing by Lisa Von Ahn and Steve Orlofsky)

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