Driven by impressive sales growth in India and China, blue-chip manufacturer 3M (NYSE:MMM) revealed on Tuesday a stronger-than-expected 16% rise in first-quarter profits and upgraded its financial guidance for the rest of the year.
The St. Paul, Minn.-based company said it earned $1.08 billion, or $1.49 a share, last quarter, compared with a profit of $930 million, or $1.29 a share, a year earlier. Analysts had been calling for EPS of just $1.44.
3M, which makes everything from Post-It notes to mining equipment, said its sales jumped 15% to $7.31 billion, solidly surpassing the $6.95 billion Wall Street expected. U.S. sales to rise 10.2%, while sales in Europe climbed 13.1% and soared 21% in Asia/Pacific.
Emerging market sales increased by 24% and now contribute 34% of the company’s global sales. 3M’s sales soared 30% in India, 27% in China/Hong Kong and 25% in Brazil.
“We are off to a tremendous start in 2011,” CEO George Buckley said in a statement. “New product flow is accelerating, boosted by higher investment in laboratory, sales and marketing and manufacturing capacity. Sales are growing faster as a result and our businesses are growing most everywhere in the world.”
3M said its first-quarter organic sales volumes grew 8.9%, while its selling prices inched up 0.1%.
Looking ahead, 3M raised its 2011 non-GAAP EPS view to $6.27 to $6.47, compared with $5.95 to $6.20 previously. Even the low end of the new range would surpass consensus calls from analysts for $6.22
Still, 3M did say it sees the earthquake and ensuing tsunami and nuclear crisis in Japan slightly hurting its 2011 results. The situation there is expected to lower the company’s 2011 sales growth by one percentage point, erase 10 to 13 cents from its EPS and pressure its operating margin by 0.30 percentage points.
“I would like to thank all our employees for their outstanding execution in the first quarter, with special heartfelt thanks to our courageous Japanese team for selflessly responding to this challenge,” said Buckley. “Our hearts go out to all of them and to their nation.”
Shares of 3M rose to fresh 2011 highs Tuesday morning, gaining 0.91% to $94.97 in recent trading. For the year, 3M’s stock has gained just over 9%.