From AFX News Limited
MINNEAPOLIS -- 3M Co., maker of Scotch tape, Post-it notes and industrial adhesives, said Tuesday that fourth-quarter earnings fell from year-ago results that included a one-time gain.
But adjusted profit exceeded expectations on Wall Street, driven by higher sales of industrial adhesives and health care products, particularly abroad.
Net income slipped to $851 million, or $1.17 per share, in the last three months of 2007 from $1.18 billion, or $1.57 per share, in the year-ago period.
The latest quarter was hurt by a charge of $12 million, or 2 cents per share, while the 2006 quarter included a gain of $354 million, or 47 cents per share.
Adjusted profit rose to $1.19 per share. Analysts, whose estimates typically do not reflect one-time items, expected earnings of $1.17 per share, according to Thomson Financial.
Sales gained 7 percent to $6.21 billion from $5.78 billion last year, and surpassed Wall Street estimates for $6.14 billion.
The industrial and transportation unit, which sells adhesives and tapes used in the automotive sector, had 14 percent higher sales of $1.9 billion. The healthcare unit boosted sales by 22 percent to $1.1 billion, led by medical and oral care products.
Chief Financial Officer Patrick Campbell said on a conference call that recent declines in 3M's roofing granules business reversed into a small fourth-quarter gain. "It is still too early to know if this business is turning the corner, as the U.S. housing market remains weak going into 2008," he said.
Maplewood-based 3M reiterated its expectation for 2008 profit to increase by at least 10 percent over the adjusted result of $4.98 per share in 2007.
Chairman and Chief Executive George Buckley said he expects to get some help from easing commodity prices such as copper and wood pulp, although 3M is still seeing steel price increases.
"We see more tailwinds now in commodity purchasing than we do headwinds," he said.
He said 3M would keep investing in future growth regardless of any economic downturn, but he added that 3M would adjust the timing of investments by paying "constant attention to real-time economic circumstances."
3M shares rose 58 cents to $78.02 Tuesday.
For the year, profit rose 11 percent to $4.1 billion, or $5.60 per share, from $3.95 billion, or $5.06 a share, in 2006. Annual revenue rose 7 percent to $24.5 billion from $22.9 billion in 2006.
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