Demand for facemasks for protection against the H1N1 flu virus helped boost 3M’s (MMM - Quote) second-quarter results, but earnings fell by 17% compared to a year ago because of other demand for other products.
The Minnesota-based manufacturer of Post-Its and Scotch Tape and hundreds of other products said Thursday that second-quarter earnings excluding one-time items fell to $1.20 a share from $1.39 a share a year ago. Revenue fell 15% to $5.7 billion.
The results solidly beat the 94-cent profit expected by analysts, according to Thomson Reuters, sending shares up nearly 5% in New York Stock Exchange-based trading.
"We drove strong results in the second quarter, exceeding our own expectations for profits, sales and free cash flow," said 3M Chairman and CEO George W. Buckley in a statement. "Operating discipline was key to the quarter.”
3M raised its full-year earnings forecast to $4.10 to $4.30 a share, compared with its view in April for earnings of $3.90 to $4.30 a share.
Part of 3M’s operating results was driven by broad cost cutting measures across the entire company. In the first six months of the year, the company laid off or provided for early retirement for 2,800 employees.
Buckley said that he remains cautious about the forecast for the economy, and that cost cutting could continue throughout the firm.
“While the exact shape and timing of the economic recovery is unknown, we will move ahead efficiently and energetically so that 3M emerges from the downturn an even stronger company," he said in a statement.
Another one-time component to 3M’s results was the sale of masks related to the outbreak of swine flu earlier this year. Buckley said that orders for 3M’s facemasks were on backorder as a result of the outbreak, which helped offset what were double-digit declines in the company’s operations the company’s other divisions.
Disclosure I am long MMM in my consumer goods/services folio.
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