CHICAGO – 3M Co. (MMM), known for Scotch tape and Post-It notes (search), Monday said second-quarter profit rose slightly and boosted the bottom of its full-year profit forecast due to strength across most of its businesses.
Net income at 3M, whose products range from Thinsulate insulation to surgical masks to optical film for TVs and is seen as a benchmark for the economy, rose to $776 million, or $1 a share, from $773 million, or 97 cents a share, in the year-earlier quarter.
Excluding a one-time charge related to plans to reinvest $1.7 billion in foreign profit, 3M earned $1.09 a share, meeting analysts' expectations, according to Reuters Estimates.
Shares slipped less than 1 percent as analysts said results in the quarter were mixed.
"It's just kind of showing the signs of a market and an economy that is just treading water right now," Morningstar analyst Scott Burns said.
Investors have fretted that higher oil prices and rising interest rates will derail the U.S. economy. However, output from U.S. factories, mines and utilities were stronger than expected in June, and businesses ran at the fastest operating rate in almost five years, a Federal Reserve (search) report showed on Friday.
3M sales rose 5.6 percent to $5.29 billion, also matching the average Wall Street estimate.
Sales in local currencies in more than 200 countries increased 3.5 percent, with selling prices contributing 0.8 percent. However, 3M said in April it expected local currency growth of 4 percent to 7 percent.
"It really is a question of whether you're half empty or half full, as far as the glass is concerned," Longbow Research analyst Dmitry Silversteyn said. He cited the raised forecast as good news, but the weak performance in the fast-growing display and graphics business as a negative.
3M expects sales for the year to continue to rise due to increased global demand for flat panel displays, particularly liquid crystal display (LCD) televisions.
However, sales at its display and graphics business, which includes the optical film business for LCD TVs, underperformed as sales fell 2.2 percent, Silversteyn said. The other businesses performed at or above expectations, he said.
Earlier this month, 3M said it expected to earn 98 cents to $1 a share after a charge of 10 cents for the repatriation of the foreign earnings.
For the year, 3M expects net profit of $4.10 to $4.15 a share. Excluding one-time items, it sees $4.20 to $4.25 a share, compared with its previous forecast of $4.15 to $4.25.
The St. Paul, Minneapolis-based company forecast a third-quarter profit of $1.06 to $1.08 a share.
However, the outlooks include the impact of 3 cents for the third quarter and about 4 cents a share for the year from its pending acquisition of filtration company Cuno. The deal is expected to close shortly after the Aug. 2 shareholder meetings both companies have scheduled.
Analysts expected a profit before one-time items of $1.09 for the third quarter and $4.23 for the full year.
3M expects sales in local currencies, excluding acquisitions, to rise 4 percent to 7 percent in the third quarter and 4 percent to 6 percent for the year.
3M shares were down 39 cents at $75.06 on the New York Stock Exchange (search).