3M raises full-year forecast after 2nd-qtr profit jumps 43 percent

3M raises full-year forecast after 2Q profit jumps

MINNEAPOLIS — 3M Co., which makes everything from Post-its to films for flat-screen TVs, said it’s optimistic about the pace of the global economic recovery and raised its full-year outlook on Thursday

3M, considered an economic bellwether because of its broad base of products, also said net income rose 43 percent for the quarter ended in June. 3M shares, which are a Dow component, rose $2.63, or 3.2 percent,to $84.93 in midday trading. Its positive outlook, along with rosy forecasts from UPS, AT&T and Caterpillar, helped boost the stock market.

Chairman and CEO George W. Buckley said 3M began seeing an economic recovery in June 2009. The company’s results and improving outlook left little doubt that it’s continuing.

Besides the U.S., most Asian governments, including China, boosted spending last year to help spur economic growth. Europe did, too. But many of those programs are nearing their ends. Buckley cautioned that economic growth could slow later this year if stimulus spending tapers off faster than the economy picks up.

“This isn’t a double-dip per se, it’s just a soft spot, and very normal as economic growth takes a breather for a while and adjusts to new circumstances such as higher interst rates, lowering stimulus, or commodity inflation,” he said. “All are very normal in my view.”

For the second quarter, 3M’s revenue rose 17.7 percent, with most of the growth in Asia (up 42 percent) and Latin America and Canada (21 percent.) U.S. sales rose 9 percent, and sales in Europe rose 4 percent, held back by the weak euro.

European growth was highest in Germany, while sales in Spain and Greece were flat, Buckley said. Those two countries have been cutting government spending because of high debt. Buckley said the problem appears to be limited to those countries. “We’ve seen no sign of contagion in our numbers.”

3M’s second-quarter profit jumped 43 percent to $1.12 billion, or $1.54 per share, compared with $783 million, or $1.12 per share, a year earlier.

Revenue rose to $6.73 billion from $5.72 billion a year ago. Analysts surveyed by Thomson Reuters had expected a profit of $1.48 per share on revenue of $6.66 billion.

Its biggest division, industrial and transportation, saw operating profits rise 66 percent to $476 million. The division includes renewable energy, auto parts, and industrial adhesives. 3M said all the businesses in that unit saw improved operating profits.

The Maplewood company now expects full year earnings of $5.65 to $5.80 per share. Wall Street was expecting $5.63.

3M has made dozens of acquisitions under Buckley, but wasn’t as aggressive in the first half of this year. The company expects to make more acquisitions in the second half of the year, “with a number of good opportunities in the hopper,” Chief Financial Officer Patrick D. Campbell said.

3M resumed share repurchases in the second quarter and expects to continue them for the rest of the year, he said.