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3M says 4th quarter earnings rise 58 percent, but miss analyst estimates

3M says 4th quarter earnings rise 58 percent, but miss analyst estimates

3M Co., which makes Scotch tape, Post-it notes and weather-stripping, reported that fourth-quarter earnings rose 58 percent largely because of a gain on the sale of part of its pharmaceutical business. But the results without the gain and its guidance for next year missed analyst expectations.
Shares of the diversified manufacturer sank more than 5 percent in Tuesday trading.
The company earned $1.18 billion (euro910 million), or $1.57 per share, in the three months ended Dec. 31, up from $746 million, or 97 cents per share, during the same period last year. Revenue rose 8.4 percent to $5.78 billion (euro4.46 billion), up from $5.33 billion during the same period last year.
But the fourth-quarter results included a gain of $354 million (euro272.9 million), or 47 cents per share, from selling the pharmaceutical business. Without that gain, 3M earned $1.10 per share, the low end of guidance of $1.10 to $1.16 from October. Analysts surveyed by Thomson Financial were expecting earnings per share of $1.14 for the fourth quarter.
3M said it would earn $5.20 to $5.45 a share for 2007, including a gain of 60 cents to 70 cents per share for the sale of its pharmaceutical unit in Europe and 21 cents per share for accounting for stock options. Excluding one-time items, 3M said it expects to earn $4.60 to $4.75 per share. Analysts were expecting $4.99 per share.
Because of its diverse portfolio of products, 3M is seen as an economic bellwether. Chairman and Chief Executive George W. Buckley said Tuesday there appears to be "slightly moderating economic growth worldwide."
But the slowing housing market hurt 3M during the fourth quarter in businesses such as granules for shingles.
"The shingle manufacturers completely missed their forecasts in the fourth quarter," said Chief Financial Officer Patrick Campbell on a conference call with analysts. "As a result, we went from producing all-out and incurring premium costs to meet excess demand early in the year to being virtually shut down in Q4." Sales in that business dropped by almost half compared to the same quarter last year, he said.
Buckley said that one unit alone cost 3M a nickel a share in earnings during the second half.
For the full year, 3M said it earned $3.85 billion (euro2.97 billion), or $5.06 per share, up from $3.11 billion (euro2.4 billion), or $3.98 per share, during the same period last year. Full-year revenue of $22.92 billion (euro17.67 billion) was up 8 percent from $21.17 billion a year ago.
Its shares tumbled $4.26, or 5.4 percent, to close at $74.70 on the New York Stock Exchange.
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On the Net:
http://www.3m.com


Updated : 2021-10-21 01:25 GMT+08:00