The Global Demographic Tailwind

[DewDiligence]

3M Hits Trifecta in Electronics, Autos, and Healthcare

[MMM logged another great quarter as it continues to come up big in emerging markets. As an aside, in the sharp selloff of the broad market on Tuesday, MMM was one of the few stocks to finish in the green.]

http://www.forbes.com/2010/04/27/3M-earnings-healthcare-markets-equities-tape.html

›By Madalina Iacob
04.27.10, 02:01 PM EDT

A spike in demand for electronics, autos and health care-related products helped 3M post record first-quarter earnings. The company that sells everything from Scotch tape to roofing materials and adhesives, posted net income 79% higher than last year's, and the St. Paul, Minn., company boosted its outlook for the year.

Dow 30 component 3M (MMM) said it earned $930 million, or $1.29 a share, from $518 million, or 74 cents a share, a year earlier. This includes a charge of 11 cents per share resulting from the recently enacted health care law. Excluding this charge, first-quarter 2010 earnings were $1.40 per share, “a record for any first quarter in 3M's history,” the company reported.

Investors cheered the results, lifting 3M shares up $1.68, almost 2%, to $89.12.

Net income beat analyst’s expectations and came in at $1.014 billion, or $1.40 per share, versus $563 million, or $0.81 per share, in the first quarter of 2009, while operating income margins were 22.8 percent for the quarter. Each of the company's six business segments posted 20%-plus operating-income margins [!]. Analysts surveyed by Reuters expected earnings of $1.21 a share.

Revenue also increased, 24.7% to $6.3 billion, boosted by a 54.1% spike in sales in Asia Pacific region and a 25.9% jump in the Latin America/Canada regions and demand for electronics and automotive manufacturing.

"By any measure, we are off to a tremendous start in 2010," CEO George Buckley said.
Analysts at Sterne Agee raised their 3M rating from neutral to buy based on the earnings.

“Call it a surprise, call it amazing performance,” wrote Nicholas Heymann, analyst at Sterne Agee, who maintains a price target for the company at $105 for the next six to 12 months.

The company said it expects to report earnings in the range of $5.40 to $5.60 per share, up from previous estimates of $4.90 to $5.10 per share. Sales are forecast to grow at a clip of 10% to 12% this year, compared with a prior outlook of 5% to 7%.‹