3M: Slow Economy to Hurt Earnings

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Diversified manufacturer Minnesota Mining & Manufacturing Co. on Monday said it expects lower second-quarter earnings due to weakness in the U.S. economy, an increasing slowdown in European and Asia Pacific economies, and continuing negative impacts from the strong U.S. dollar.

Excluding one-time items, second-quarter earnings are estimated to be $1.10 to $1.14 per share. This range includes anticipated negative currency effects of about 7 cents per share, or 6 percent. In the second quarter last year, 3M earned $470 million, or $1.18 per share.

The company was expected to earn between $1.17 to $1.23 a share with a mean at $1.19, according to market research firm Thomson Financial/First Call.

3M expects sales in the second quarter -- excluding currency effects -- to increase approximately 1 percent from the same quarter last year. Currency will reduce international sales by over 8 percent, with total sales including U.S. to decline 4 to 5 percent.

``Based on sales trends over the last half of the second quarter, it is clear that economic weakness is now manifesting itself in Europe and Asia Pacific in addition to the United States,'' said Chairman and Chief Executive W. James McNerney Jr. in a statement. ``We are keenly focused on improving operational excellence across the company, and aggressive cost reduction has been and will continue to be an important element of this effort.''

3M also said that international pressures would continue to impact results in the second half of 2001, and expects full-year earnings in the range of $4.50 to $4.75 a share, excluding nonrecurring items, down from its prior estimate of $4.75 to $5.00 a share.