3M’s adjusted Q3 net income fell 1% to $1.52 per share. Analysts were expecting $1.61 per share.
Shares have fallen 6% in premarket trading.
“The business environment remains challenging, as the economic softening that we experienced late in the second quarter continued into the third,” said CEO George W. Buckley. “While growth rates were good across much of our portfolio, LCD TV remained weak and momentum slowed in other parts of electronics following several quarters of very good growth. In addition, ongoing policy uncertainty and austerity are affecting growth in Western Europe, which reduced sales in the quarter. As is typical, we are seeing the impact of these changes earlier than most as our customers decrease production in order to lower their inventories. Conversely, we should benefit more quickly when those markets recover.”
Management also slashed guidance:
Reflecting this outlook, 3M updated its 2011 full-year performance expectations. The company now expects earnings to be in the range of $5.85 to $5.95 per share versus a prior expected range of $6.10 to $6.25. Included in this estimate is a $0.22 per share year-on-year increase in pension and postretirement benefit expense. Excluding the pension and postretirement expense increase, 2011 earnings would be in the range of $6.07 to $6.17 per share, an increase of 8 to 10 per cent. 3M also expects full-year organic sales volume growth of 3 to 4 per cent versus a prior expected range of 6 to 7.5 per cent. The company now expects that currency effects will add 3 to 3.5 per cent to sales for the year and acquisitions will add another 3 to 3.5 per cent.
Analysts were expecting $6.16 per share for the 2011.
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