* Q3 EPS ex-items of $1.37/shr versus estimate $1.17/shr
* Revenue of $6.2 bln versus estimate of $5.77 bln
* Shares up 3.6 percent
(Adds details from conference call, analyst and executive
comments, updates shares)
By James B. Kelleher
CHICAGO, Oct 22 Diversified U.S. manufacturer
3M Co (MMM.N) posted stronger-than-expected quarterly earnings
and raised its full-year forecast, encouraged by strong demand
for consumer electronics and for its respiratory masks, which
were snapped up by people afraid of the H1N1 flu virus.
3M said on Thursday its mask factories had been working
"24-7" since May trying to keep up, without reducing backlog.
Executives estimated that incremental demand related to H1N1
flu virus fears had added somewhere between $80 million and
$100 million to its third-quarter sales.
Still, George Buckley, 3M's chairman, chief executive and
president, remained cautious about the near term. He said that
so far, despite hundreds of billions of dollars of stimulus
spending by governments worldwide, consumers remained cautious
in most markets.
"We all know the hardest time to forecast sales accurately
is at turning points in demand," Buckley said. "I don't think
forecasting will get much easier any time soon."
3M, which makes products ranging from Scotch tape to
optical films for liquid crystal display televisions, reported
third-quarter net income of $957 million, or $1.35 a share,
down from $991 million, or $1.41 a share last year.
Excluding one-time items, 3M reported income of $1.37 a
Revenue fell 5.6 percent to $6.2 billion.
The results beat analysts' average forecasts of net income
of $1.11 a share, profit excluding one-time items of $1.17 a
share, and sales of $5.77 billion, according to Thomson Reuters
The company raised its 2009 earnings forecast, saying it
now expects full-year earnings to be $4.50 to $4.55 a share, up
from a previous range of $4.10 to $4.30 per share.
C. Stephen Tusa, an analyst at J.P. Morgan, called the
company's results "near flawless" and said the raised forecast
suggested the improving trends were sustainable at least in the
Sales of 3M's display and graphics products rose 5.5
percent during the quarter, while healthcare sales -- including
sales of protective face masks -- rose 4.7 percent.
Those gains helped offset sales declines in the company's
other areas, including consumer and office products.
3M said it planned to invest $20 million to increase
respiratory production capacity in Singapore, the latest such
expansion this year.
"Our factories have been running flat out since May of this
year to keep up with demand," Patrick Campbell, the company's
chief finance officer, said during the call.
"And we see back orders well beyond the end of the year."
The company's shares were up $2.77, or 3.6 percent, at
$79.10 in late afternoon trading on the New York Stock
(Editing by Maureen Bavdek, Gary Hill)