Updated from 8:13 a.m. EDT
Consumer products behemoth
posted solidly higher first-quarter earnings Monday and said its full-year profit will be consistent with prior predictions.
The stock sold off, however, as investors focused on a top-line miss. The shares were down more than 5% at midmorning, dragging the
The company earned $809 million, or $1.03 a share, in the quarter, compared with $722 million, or 90 cents a share, last year. Sales rose 4.6% from a year ago to $5.17 billion. Analysts had been forecasting earnings of $1.01 a share on sales of $5.26 billion.
By segment in the first quarter, 3M's health care division saw sales rise 5.2% from a year ago in local currencies and 7.9% overall; industrial saw sales rise 2.6% in local currencies and 5.5% overall; display and graphics saw sales rise 0.6% from a year ago in local currencies and 2% overall; and consumer and office saw sales fall 0.5% in local currencies and rise 2.3% overall.
"Broad-based productivity improvements achieved through our corporate initiatives and solid growth in key areas, like optical films and health care, helped us deliver over 14 percent earnings per share growth in the first quarter," the company said. "Improved operational efficiency, sales growth, and pricing were key to overcoming slow economic growth in Western Europe and Japan and continued raw material price pressure."
For the second quarter, 3M expects to earn $1.08 to $1.10 a share, compared with the Thomson First Call consensus estimate of $1.08 a share. For all of 2005, 3M expects to earn $4.15 to $4.25 a share, compared with the estimate of $4.22 a share.
"We expect to deliver higher organic growth rates the rest of this year through new product sales enabled by our diverse technology platforms; our Acceleration initiative; growth drivers, like LCD films; and our strong presence in fast-growth markets like China and Eastern Europe," 3M said.