NEW YORK (
raised its full-year earnings guidance after posting a 15.5% increase in first-quarter earnings, as all six of the company's business segments posted operating margins above 21% in the quarter.
For the quarter ended March 31, earnings increased to $1.1 billion, or $1.49 a share, from $930 million, or $1.29 a share, in the same period a year earlier.
Analysts were expecting earnings of $1.44 a share.
Operating income for the quarter was 21.6%, as all of the company's six business segments, which include Electro and Communications, Industrial and Transportation, Display and Graphics, Consumer and Office, Safety, Security and Protection Services, and Health Care, saw strong gains.
First-quarter sales rose 15.2% to $7.31 billion, including an 8.9% increase in organic sales volumes. 3M beat Wall Street's revenue expectations of $6.95 billion for the quarter.
"We are off to a tremendous start in 2011 with first-quarter organic sales growth of 9%, or 10.5% adjusting for Japan and H1N1 impacts," Chairman, President and CEO George Buckley said in 3M's quarterly report. "New product flow is accelerating, boosted by higher investment in laboratory, sales and marketing and manufacturing capacity. Sales are growing faster as a result and our businesses are growing most everywhere in the world."
3M estimates that both direct and indirect business disruption resulting from events in Japan will reduce full-year sales growth by about one percentage point, operating margins by 30 basis points and earnings by 10 cents to 13 cents a share.
However, the company increased its guidance for 2011. It forecasts that its full-year earnings will be in the range of $6.05 to $6.25 a share, versus a prior expectation of $5.95 to $6.20 a share. This estimate includes an increase of 22 cents a share due to pension and postretirement benefits.
The company also updated its expectation for organic sales volume growth to a range of 6% to 7.5% versus a prior range of 5.5% to 7.5%.
3M expects that currency effects will add 2% to 3% to sales for the year and acquisitions will add another 4% to 6%.
The company expects its new product vitality index, which measures the percent of sales attributed to new products, to rise again in 2011, on top of a record 31% in 2010.
3M shares were rising 1.5% to $95.50 in premarket trading Tuesday.
--Written by Theresa McCabe in Boston.
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