3M Co., maker of Scotch tape and Post-it notes, said Thursday its first-quarter earnings dropped compared to a year ago when it had a big gain on the sale of one of its businesses. But the results topped analyst expectations.
3M said its profit fell 28 percent to $988 million, or $1.38 per share, from $1.37 billion, or $1.85 per share, during the same period a year ago. Prior-year results included a one-time gain of $422 million, or 57 cents per share, from the sale of 3M’s branded pharmaceutical business in Europe.
Sales rose 9 percent to $6.46 billion from $5.94 billion a year earlier.
Analysts surveyed by Thomson Financial forecast earnings of $1.35 per share on revenue of $6.34 billion.
3M said international sales were solid and that profits increased in four of its units. Profit declined in its consumer and office and display and graphics businesses.
The Maplewood-based company affirmed its full-year guidance of about $5.48 per share.
Two-thirds of 3M sales came from international subsidiaries, and growth in developing economies allowed 3M to overcome the economic slowdown in the U.S., Chairman and Chief Executive George Buckley said. That presence outside the U.S. means 3M has benefited from the weak dollar. Currency exchange rates accounted for 6 percentage points of 3M’s sales growth, adding 7 cents to earnings per share.
Operating profits in 3M’s largest division, Industrial and Transportation, rose 15 percent to $472 million.
Profits dropped 37 percent in Display and Graphics, to $187 million. Price competition has become more intense for 3M’s coatings for LCD screens. Flat-panel LCD TV sales are growing quickly, but price pressure has been cutting 3M sales of what was once a fast-growing, high-profit product.
“We’re going to see more turbulence in that market as the set manufacturers, in particular, scramble for share,” Buckley said on a conference call.