Diversified U.S. manufacturer 3M Co. reported a higher quarterly profit Thursday, lifted by strong sales to the consumer electronics industry, particularly of products used in flat-screen TVs.
But the company, which has repeatedly beat expectations and raised its full-year forecast in recent quarters, shaved 6 cents off its full-year forecast, citing costs related to its recent acquisition spree. That sent its shares lower in premarket trading.
"From a corporate performance perspective, they did just fine," said Brian Langenberg of Langenberg Co.
"But we live in a quarter where it is expected that you beat your number and raise your estimate. They met and they took down the high end of guidance because of deal dilution, which is understandable. But that won't be good enough for traders today," he said.
3M, which makes products ranging from Post-It notes to respiratory masks, posted a third-quarter profit of $1.1 billion, or $1.53 a share, up from $971 million, or $1.35 a share, a year earlier.
The company that also makes Scotch tape and a host of medical products, said sales rose 11 percent to $6.9 billion, with double-digit sales increases in three of its six units.
Analysts, on average, expected Minneapolis-based 3M to report a profit of $1.51 a share on sales of $6.83 billion, according to Thomson Reuters I/B/E/S.
"To see the growth across almost all the businesses, where before it was more patchy, speaks to the effectiveness of management's restructuring of the business during the downturn," said Adam Fleck, an analyst at Morningstar.
The company said sales in the Asia Pacific region, including China and Korea, were especially strong, jumping 28 percent. Sales in emerging markets grew 25 percent and now comprise 34 percent of worldwide sales, it said.
The company said it now expects a full-year profit of $5.70 to $5.74 per share, down from a previous estimate of $5.70 to $5.80 a share. It said the reduction was "due solely to anticipated earnings dilution" related to a series of acquisitions it made during the quarter, including its $900 million purchase of Cogent Inc.
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