3M raises 2011 forecast after 1Q profit jumps
3M said Tuesday its quarterly profit jumped 16 percent from a year ago, beating analysts' estimates.
The Maplewood-based maker of Post-Its and Scotch Tape also raised its full-year earnings expectations despite taking a hit from the earthquake and tsunami in Japan.
3M CEO George Buckley says the disasters cost the company about $27 million or 3 cents a share through March 31. He said the impact from the Japan disaster will cut a little deeper in the second quarter before moderating later this year.
"We estimate it would cost us about $140 million for the year or somewhere between 10 cents to 13 cents per share depending on the geographic market mix of sales. These are worldwide impact numbers, with only about half of the direct impact being in Japan," Buckley said.
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3M's exposure to Japan is higher than many of its peers; the country accounts for 9 percent of 3M sales.
Buckley said component shortages will get worse for a while. He said about half of the hit in the second quarter will be tied to 3M's automotive business.
Buckley said a strong rebuilding recovery in Japan will likely begin in the third or fourth quarter and possibly extend into next year. That could push up demand for 3M products.
3M's growth and that of the U.S. economy will be led by demand from emerging markets, Buckley said.
Chief financial officer David Meline said 3M is moving most of its spending on buildings and equipment outside the United States.
"What you see this year in 2011 is the first time the company is now having more than 50 percent of its capital deployed internationally. So as we see the recovery and demand, we are adding capacity and where we're adding it is internationally close to where the growth is."