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3M Reiterates Growth Forecast

It sees 2005 earnings of $4.15 to $4.23 a share.
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3M

(MMM) - Get Report

repeated its 2005 earnings guidance Tuesday, saying its far-flung operations and diverse product portfolio are helping it weather a slowing global economy.

At a shareholders meeting, the company forecast full-year earnings of $4.15 to $4.25 a share, the same estimate it made when it reported its first-quarter earnings on April 18. Analysts surveyed by Thomson First Call are currently predicting 3M will earn $4.23 a share in 2005, a penny more than they saw in April.

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"This year, we are seeing slowing growth in the world's mature economies, and we continue to get mixed signals from economic reports and first-quarter corporate earnings," the company said. "Against this uncertain backdrop, 3M was able to deliver stronger-than-expected earnings in the first quarter this year."

The market has been underwhelmed by 3M's ability to meet earnings estimates of late, sending the stock down 5% after the April numbers hit. In midmorning trading Tuesday, the stock was off $1.30, or 1.7%, to $76.43.

3M forecast full-year sales growth of 5% to 8% over the $20 billion it put up in 2004, a rate of improvement that is consistent with the Thomson First Call consensus estimate of $21.32 billion.

The company said it expects to derive close to half of its total growth over the next three years from developing countries like China, Russia, Eastern Europe, Brazil and India.

"Over the last several years, we have transformed 3M into a company with an enormous capacity to manage many new concepts and directions simultaneously," the company said. "Our new capabilities, combined with our already strong and unique culture, give me confidence that 3M's future is brighter than ever."