3M Co. on Friday reported growing profits across most of its businesses, and said sales have turned around for optical films for televisions and computers, a key business that had lagged recently.
The St. Paul-based company said it earned $894 million, or $1.18 a share, in the third quarter, up 6.4 percent from a year ago, when it earned $840 million, or $1.08 a share. The latest result beat estimates by 6 cents a share. Revenue rose 8.8 percent, to $5.86 billion.
Three months ago, the company disappointed investors because of slack demand for optical films and problems at a new manufacturing plant. But 3M said volume jumped 20 percent in that division in the third quarter, though its operating profit actually slipped 4 percent from a year ago.
“This business remains one of 3M’s jewels,” said Chief Financial Officer Patrick Campbell.
3M’s optical films expose it to the ups-and-downs of the volatile consumer electronics business. Worries about revenue volatility have held the stock back, said Dmitry Silversteyn of Longbow Research.
“The company gets judged increasingly by its performance on the top line rather than its earnings, which have been pretty steady,” he said.
3M is often viewed as an economic indicator because of its wide range of products and worldwide sales.
“We see nothing at the moment that would steer our ship off course, and economic conditions appear to resemble those in recent quarters,” said Chief Executive George Buckley.
3M offered no update on its plans to sell its pharmaceutical business, though Campbell told analysts, “I am hopeful that we’ll bring closure to this project soon.”
Shares of 3M gained $2.07, to $78.47, on the New York Stock Exchange.
In other earnings news:
– Merck & Co. posted a 34 percent drop in third-quarter net income, citing flat sales, restructuring costs and higher overhead, including increased marketing costs for recently approved products.
The Whitehouse Station, N.J.-based drugmaker said net income was $940.6 million, or 43 cents a share, down from $1.42 billion, or 65 cents a share, a year ago.
The company’s revenue slipped to $5.41 billion from $5.42 billion.
Excluding a charge of $249.2 million, or 8 cents per share, for restructuring costs such as site closings and severance, Merck would have earned 51 cents a share. On that basis, analysts were expecting 50 cents a share.
The maker of osteoporosis treatment Fosamax and Singulair for asthma and allergies also said it was adding $598 million to its reserves for future legal defense costs over its withdrawn painkiller Vioxx.
Merck stock added $1.15, to $45.64, on the NYSE.
