* 1st-quarter profit, revenue, miss expectations
* EPS of $1.61 misses analysts' estimates by 4 cents
* Revenue up 2 pct to $7.63 billion
* Falling prices of flat-panel TVs a problem
* Shares fall 2.4 pct
(Adds details on TV unit, updates stock price)
By Ernest Scheyder
April 25 Diversified U.S. manufacturer 3M Co
cut its 2013 profit forecast on Thursday, citing
weakening demand for flat-panel televisions as well as the
stronger U.S. dollar.
The lowered outlook came after first-quarter profit and
revenue both missed Wall Street expectations.
3M, which makes a range of products from Post-It notes to
Scotch tape, blamed falling sales in its consumer electronics
segment, which makes films used to make flat-panel TV displays.
Prices for those TVs, as well as the amount of televisions
sold, have fallen recently as consumers move toward touch-screen
devices. Global demand for TVs is expected to plateau this year
as many consumers in developed countries already own a
TV manufacturers Sony Corp and Samsung Electronics
Co Ltd are among 3M's largest customers. Both are
paring their TV units.
3M executives had expected weak demand for TV parts and
other electronic materials, including insulation and fluids used
to make computer chips, but they said actual sales were worse
"We expected a challenging start to the year, but in fact
market conditions were tougher than we had expected," Chief
Executive Inge Thulin said on a conference call with investors.
The machines 3M uses to make the TV films are complex and
expensive, and the trick for the company will be to find even
more ways to use the machines for touchscreen products, William
Blair & Co analyst Nick Heymann said.
Already, Apple Inc is a key 3M customer.
"You just have too much capacity" in the TV market, Heymann
said. "3M is working through it. Now, they've got to move to the
While a 56 percent drop in pension payments boosted
first-quarter margins, analysts were wary because higher sales
failed to contribute more to the margin strength.
3M now expects to earn $6.60 to $6.85 per share this year, a
range mostly below the $6.82 average analyst estimate, according
to Thomson Reuters I/B/E/S.
3M previously had expected to earn $6.70 to $6.95 per share
Also, the rising value of the U.S. dollar compared with
other global currencies harmed results, executives said.
Previously, the company had not expected foreign currency
changes to harm 2013 results, but now it was seen cutting
revenue by 1.5 percent.
3M shares were down 2.4 percent at $105.33 late on Thursday
morning on the New York Stock Exchange. The stock has gained
about 16 percent this year, outpacing the Dow Jones industrial
average's rise of roughly 12 percent.
St. Paul, Minnesota-based 3M posted first-quarter profit of
$1.13 billion, or $1.61 per share, compared with $1.13 billion,
or $1.59 per share, in the year-earlier period.
Profit per share missed analysts' estimates of $1.65. The
number of outstanding shares fell, boosting the most recent
earnings per share.
Revenue rose 2 percent to $7.63 billion, missing the $7.81
billion estimate from analysts.
Thulin, who took the top job last year, began a
restructuring in January. He merged 3M's security and
traffic-safety units, eliminating about 300 jobs, and identified
other units that 3M would need to fix, sell or close.
Thulin has said 3M needs to prune its broad portfolio of
products, and is likely to focus on fewer but larger takeovers.
(Reporting by Ernest Scheyder in New York; editing by Gerald E.
McCormick, Maureen Bavdek, Jeffrey Benkoe and Matthew Lewis)