NEW YORK, N.Y. – 3M Co. said Thursday its profit inched 3 per cent higher in the fourth-quarter as more demand for products for the home, office and automobile offset declining sales of high-tech products.
The maker of everything from Scotch Tape to computer arms has been fighting to grow earnings amid a slowdown in key markets. Growth in developing countries, where 3M now derives more than half of its sales, is slowing. Weakness in Western Europe is also a headwind, 3M said, and it doesn’t know when things there will get better.
3M believes rapid growth in China and other emerging nations will resume in the second half of the year. The slowing pace of growth in those countries, although still robust compared with other parts of the world, was in part to blame for unexpectedly weak results at 3M in last year’s third quarter.
3M is maintaining its current profit forecast for 2012. The company said that it’s more confident in its ability to grow earnings than it was three months ago, but remains cautious.
The Maplewood, Minn., company said Thursday it earned $954 million, or $1.35 per share, in the final three months of 2011, compared with $928 million, or $1.28 per share, a year ago.
Revenue rose 6 per cent to $7.09 billion.
Wall Street was banking on even smaller earnings growth. Analysts polled by FactSet expected a profit of $1.31 per share. Revenue matched analysts’ forecast. Shares rose $1.02 to $87.52 in afternoon trading.
3M said sales were strongest at its industrial and transportation unit, rising 14 per cent. Sales in its biggest segment were driven by abrasives and a number of other products used in planes and cars.
Sales rose 6 per cent at the consumer and office unit, which makes products most familiar to consumers, like Post-Its and Scotch Tape.
Slumping sales at the electronics and communications and display and graphics segments continue to be the biggest drag on earnings. The slowdown is mostly the result of lower sales of film for LCD TVs.
For all of 2011, 3M earned $4.28 billion, or $5.96 per share, compared with 2010 results of $4.09 billion, or $5.63 per share.
This year, 3M expects earnings per share between $6.25 and $6.50. Analysts currently predict a profit of $6.33 per share. That equates to per-share growth of 5 per cent to 9 per cent, compared with 6 per cent in 2011.
As it contends with slowing demand in some markets, 3M is trying to keep costs low. Its efforts include hiring freezes in the developed world.
