3M's ( MMM) second-quarter earnings came in at the low end of the reduced guidance range it gave earlier this month. The manufacturer also predicted a stabilization in the market for liquid crystal display monitors, but said the profitability of its optical film unit would be crimped by a shift toward television sets from computers. The company also said it is experiencing capacity constraints in units other than the troubled graphics division. 3M earned $882 million, or $1.15 a share, in the latest quarter, up 17% from $754 million, or 98 cents a share, a year ago. The latest period had a net 10-cent gain, excluding which 3M earned $1.05 a share. On July 7, the company had forecast second-quarter earnings of $1.04 to $1.09 a share. Analysts were looking for $1.07 a share in the period. Second-quarter sales were $5.7 billion, up 7.5% from a year ago. Analysts were pegging $5.68 billion. Shares of 3M are down 12% since the July 7 profit warning. At the time, the company cited lower-than-expected sales volume and higher-than-expected capacity start-up costs in optical systems division, which makes film used in flat-panel televisions and computer displays. The comments hurt LCD makers like Corning ( GLW) and even some electronics retailers like Circuit City ( CC). In its release Tuesday, 3M said the July 7 warning reflected the sudden impact of high inventory levels among customers. "While forecasting demand in this business is difficult, we anticipate that inventories will return to normal in the second half of the year and sales growth will accelerate as consumer demand for LCD TV increases," 3M said. "As a result, we continue to expect record sales of our optical films in 2006. Margins will be somewhat lower due to a shift in mix from monitors to larger format LCD televisions."