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3M says 2Q profit rose 3.4 percent, dampened by LCD sales falloff and Japan impact
MINNEAPOLIS (AP) ' 3M's second-quarter profit rose 3.4 percent as slowing demand for films for LCD televisions dampened strong growth in its other businesses.
3M Co. makes office supplies such as Scotch tape and Post-it notes, coatings for television screens, roofing shingles and other industrial supplies.
The company said Tuesday that it earned $1.16 billion during the quarter, or $1.60 per share. Revenue rose 14 percent to $7.68 billion. That topped analyst expectations for net income of $1.59 per share on revenue of $7.52 billion, according to FactSet.
The Japan earthquake in March hurt sales growth by 2.4 percentage points, and cut 7 cents per share from 3M's profit.
3M has been coping with a slowdown in films that coat the screens of LCD televisions. But sales of those screens fell 22 percent in the last quarter, faster than expected. 3M said too much inventory and a maturing market are driving TV manufacturers to go with cheaper films. Sales fell 10.6 percent to $973 million in 3M's Display and Graphics business, the only one of its six big divisions to post a sales decline. That division still had operating income of $222 million.
Its biggest division, Industrial and Transportation, saw operating profits of $544 million on sales of $2.6 billion.
Not counting companies it bought, 3M sales volumes rose 3.2 percent, and prices rose 0.8 percent.
Investors consider 3M an economic bellwether because of the diversity of its businesses.
"While economic growth moderated a bit in the second quarter, we believe that the global economy will continue to expand and 3M is well-positioned to capitalize on that growth," said Chairman and CEO George Buckley.
Maplewood, Minn.-based 3M raised the low end of its full-year guidance by 5 cents, to $6.05 to $6.25 per share. Analysts have been expecting $6.23. It expects full-year profits to be hurt by 11 cents to 12 cents per share by the impact of the Japan earthquake.