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3M Tanks on Sticky Earnings, Abrasive Guidance

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3M Company (NYSE: MMM) is down after posting weak first-quarter earnings and lowering its 2013 outlook.

The St. Paul, Minnesota-based firm's EPS rose just over one percent year-over-year to $1.61, falling short of the $1.65 analysts expected.

Revenue climbed two percent to $7.63 billion, finishing shy of the $7.81 billion Wall Street consensus.

Strong Grip in the Western Hemisphere

3M's US sales jumped 5.3 percent during the quarter, representing the company's best-performing geographic region.

And, sales in Latin America and Canada grew a healthy 2.7 percent.

Meanwhile, EMEA sales remained flat while sales in the Asia-Pacific region declined a modest 0.5 percent.

Polished Industrial Sales

3M's industrial segment grew 4.6 percent to $2.68 billion. The surge was led by aerospace, industrial adhesives & tapes, liquid filtration and personal care products.

The conglomerate's healthcare, safety & graphics and consumer segments all experienced increased sales, as well. Healthcare rose 2.8 percent to $1.31 billion on increased sales across the board.

Safety & graphics climbed 2.2 percent to $1.42 billion on strong growth in architectural markets, building & commercial services, commercial graphics and personal safety. The consumer segment increased two percent to $1.08 billion, led by sales in consumer healthcare, DIY and homecare.

The only segment that declined was electronics & energy, which fell 3.3 percent to $1.28 billion during the quarter due to decreased telecom sales.

Another $40 Million on its Plate

On March 13, Ceradyne, a subsidiary of 3M, announced it received an order from the US Government for 242,000 body armor plates over a six-month period for use in Afghanistan. According to Ceradyne, the deal is worth over $40 million.

Lawsuit Ends on Successful Note

On March 28, 3M announced victory in its patent infringement lawsuit against Avery Dennison (NYSE: AVY). The case related to retro-reflective sheeting products used on pavement markings, traffic signs and other traffic control products.

Adding insult to injury, the court dismissed Avery's claims of antitrust violations and patent infringement against the multi-industry giant.

Abrasive Guidance

3M has lowered its 2013 EPS guidance from $6.70-$6.95 to $6.60-$6.85, which would likely place it short of the $6.83 analysts want to see. Chairman, President and CEO Inge G. Thulin attributed the reduced expectations to “the stronger U.S. dollar and softer demand in some end markets.”

Stock Losing Heat

After four consecutive days of gains and finishing close to $108 on Wednesday, 3M has fallen below $105 in the late morning hours. The stock is at its lowest point this week on word of the company's lackluster earnings and guidance.

3M is down around three percent on Thursday.

Posted-In: Ceradyne Inge G. ThulinEarnings News Guidance Best of Benzinga


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