3M Co. (MMM: 80.07 +1.58 +2.01%) announced its second quarter 2010 sales guidance of $6.6 billion to $6.75 billion, reflecting an organic growth of 16% to 18% compared with the second quarter of 2009.The median of the company’s guidance is above the Zacks Consensus Estimate of $6.58 billion.
For the first quarter of 2010, 3M reported revenues of $6.3 billion and earnings from continuing operations of $1.40 per share, exceeding the Zacks Consensus Estimate of $1.21. During the quarter, the company experienced a double-digit growth in each of its six business segments: Display and Graphics, Electro and Communications, Industrial and Transportation, Safety, Security and Protection Services, Consumer and Office and Health Care.
The company has also shown double-digit expansion in all geographic regions. Results were the strongest in the emerging economies, where sales grew by 47% versus the first quarter of 2009.
3M is committed to expand its activity worldwide. It focuses on gaining retail customers, making additional investments to establish its brands and introduce innovative products that would drive sustainable growth.
The 3M brand has household names such as Nexcare, Post-it, Scotch, Scotch-Brite and Scotchgard. We believe that continued capital expenditure with new product launches and increased focus on emerging markets like China and India should bolster its prospects across most end markets.
However, the company’s growth objectives are largely dependent on timing and market acceptances of its new product offerings, including its ability to continually renew its pipeline and market its products at acceptable prices.
Foreign currency exchange rates and their fluctuations may impact the company’s ability to realize projected growth rates in sales and earnings.
As previously announced, the company estimates organic sales volumes for FY10 to grow 10% to 12% and earnings per share to be in the range of $5.40 to $5.60.
Together with its subsidiaries, 3M Company operates as a diversified technology company with manufacturing operations spread over 60 countries worldwide. Direct competitors of 3M Co. are Avery Dennison Corporation (AVY: 32.52+0.13 +0.40%), El DuPont de Nemours & Co. (DD: 35.22 -0.02 -0.06%) andJohnson & Johnson (JNJ: 59.35 +0.11 +0.19%).We currently maintain our Neutral recommendation on 3M Co.
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