Maplewood-based 3M's stock fell about 6 percent Tuesday after the company cut its 2011 earnings and sales forecast and posted profits that fell short of analysts' estimates for the first time in two and a half years.
The report is worrisome as 3M is often considered a bellwether for the economy because the materials it makes show up in cars, planes, hospitals, dentist offices, TVs, cell phones and myriad other devices and places.
For the three months ending in September, 3M's net income fell to $1.1 billion — a 2 percent decline from the same quarter a year ago.
On the other hand, sales rose nearly 10 percent to $7.5 billion. But analysts expected even more robust growth.
3M CEO George Buckley said the quarter turned out much differently than expected. First there was the widespread concern about the European debt crisis. Then, Buckley says, sales of electronics started to fall rapidly.
"It began with TVs, extended to other consumer devices and has now crept a bit into factory automation," he said.
Buckley said 3M is keenly aware of consumer worries around the world. He expects even slower growth in the U.S. economy which many economists are concerned is already approaching stall speed. He chose to see that as a positive, however.
"At least the numbers are positive and it's not a sort of a cataclysmic downturn," he said.
Buckley's assessment carries some weight because 3M's operations reach across so many areas of the U.S. and global economies.
About 70 percent of the company's sales occur outside the U.S. Morningstar analyst Adam Fleck said 3M's declining profit is more of a trouble sign for the world than the U.S.
Fleck said the quarter's results show that 3M's growth in Asia, Europe, Latin America and Canada has slowed.
"Certainly they're a bit of leading indicator and I think that's a bit worrying," he said.
Even 3M's traditionally fast-growing markets in developing countries are being affected.
"Their emerging market growth ... slowed again to around 11 percent, which is still very strong. But it was 17 percent in the prior quarter," Fleck said.
But Fleck said he doesn't expect a few quarters of slowdown and weakening profitability at 3M will really erode the company's advantages over its competitors long-term.
Edward Jones analyst Jeff Windau said even slower growth for 3M is welcome these days.
"Globally you may see slowing growth but there still is growth, especially in emerging markets," he said.
Still, investors dumped 3M stock Tuesday. The company's 6 percent decrease in stock price was the biggest drop for the day among the 30 Dow Industrials. One analyst downgraded the company from buy to neutral. 3M stock closed down $5.14 at $77.04.