ST. PAUL, Minn. -- 3M has announced third quarter earnings of $1.35 per share on sales of $6.2 billion, with operating income margins of 23.9 percent. Sales and per-share earnings declined 5.6 percent and 4.3 percent year-on-year, respectively. On a sequential basis, sales and per-share earnings increased 8.3 percent and 20.5 percent, respectively, and operating income margins improved by 3.1 percentage points versus second quarter levels. Free cash flow for the third quarter was $1.6 billion, up 97 percent year-on-year.

Excluding special items, net income was $971 million and earnings were $1.37 per share, down 2.8 percent and 3.5 percent year-on-year, respectively. 3M’s Display and Graphics and Health Care businesses each delivered double-digit year-on-year profit improvements. All business segments and all geographic regions reported sequential sales improvements.

“These results reflect the strength of 3M’s business model as we again delivered higher than expected sales, strong operating margins and outstanding free cash flow,” said George Buckley, 3M chairman, president and CEO. “At the same time, we continued to invest in research and development, improving our supply chains and strengthening our brands and customer relationships, which will position us well as economies improve.”

For the second consecutive quarter, the company raised its 2009 earnings expectations. 3M now expects 2009 full-year earnings to be in the range of $4.50 to $4.55 per share, versus a prior range of $4.10 to $4.30. The company also updated its 2009 organic sales volume expectations to a decline of 9.5 percent to 10.5 percent from a previous range of down 10 percent to down 13 percent. All estimates quoted exclude special items.

Third-quarter worldwide sales totaled $6.2 billion, a year-on-year decrease of 5.6 percent. Local-currency sales including acquisitions decreased 3.3 percent, while currency translation effects reduced sales by 2.3 percent.

Local-currency sales including acquisitions increased 5.5 percent in Display and Graphics and 4.7 percent in Health Care, offset by declines of 2 percent in Safety, Security and Protection Services, 4.8 percent in Consumer and Office, 6.4 percent in Industrial and Transportation and 15.3 percent in Electro and Communications. Excluding special items, third-quarter net income was $971 million, or $1.37 per share, versus $999 million, or $1.42 per share, in the third quarter of 2008.