3M Company (MMM) reported third-quarter earnings of $1.35 per share on sales of $6.2 billion, with operating income margins of 23.9%. This was higher than the Zacks Consensus Estimate of $1.17 per share. Sales and per-share earnings declined 5.6% and 4.3% 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.

For Consumer and Office, sales were $923 million, down 4.8% year-on-year in local currency, which includes 2.8 percentage points from acquisitions; currency impacts reduced sales by 1.8%. For Display & Graphics, sales were $896 million, up 5.5% year-on-year in local currency, including 2.5% points of growth from acquisitions; currency impacts reduced sales by 1%; sales rose 10.8%  sequentially. In Safety, Security and Protection services, sales were $864 million, down 2% year-on-year in local currency; currency translation impacts reduced sales by 4.1%. Finally, in Electro and Communications, sales were $617 million, down 15.3% year-on-year in local currency; currency translation reduced sales by 0.9%.

Free cash flow for the third quarter was $1.6 billion, up 97% year-on-year.

Total cash and equivalents stand at $3.9 billion with long-term debt at $5.2 billion and shareowner’s equity at $12.9 billion.

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 current Zacks Consensus Estimate stands at $4.24 per share.

3M Company, together with its subsidiaries, operates as a diversified technology company worldwide. It operates in six segments: Industrial and Transportation; Health Care; Safety, Security and Protection Services; Consumer and Office; Display and Graphics; and Electro and Communications. The company was formerly known as Minnesota Mining and Manufacturing Company. 3M Company was founded in 1902 and is based in St. Paul, MN.

We currently have an Outperform recommendation on MMM.
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