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Health care sales drive 3M income up in Q3

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Updated 4 p.m.

Strong sales growth in its health care sector helped 3M boost third quarter net income 6 percent to $1.3 billion. Revenue reached $8.1 billion. 

3M's health care segment had the greatest sales growth in the quarter, with developing markets providing a big boost.

"Many emerging economies are beginning to spend more on health care and a lot of wound care and disposable items that 3M manufactures are being consumed to a greater degree," said Matt Arnold, an analyst with the investment firm Edward Jones.

3M says it has made substantial investments to bolster its  health care businesses in China, Germany, Poland, Thailand, India, the United Kingdom, and the United States.

Last week, the company announced a $58 million expansion in the U.S. to meet growing demand for medical tapes, dressings, surgical drapes and other wound care products.

Overall, 3M's sales increased 6 percent in the U.S. and 4 percent in Asia. But sales fell in Europe, Latin America and other markets.

About two-thirds of 3M's sales are outside the U.S. The company's products are used across the housing, electronics, automotive, aviation and many other industries. 3M's products range from sandpaper and orthodontics to bandages and films that make TV screens brighter. 

All that makes 3M's results a closely-watched economic indicator. 

"3M is definitely viewed as a bellwether of the economy and if you look at the quarter, the United States did very well," said Arnold. "Latin American and Europe softened a bit, especially Europe."

U.S. stocks rose sharply in afternoon trading Thursday, driven by encouraging earnings from companies including Caterpillar and 3M. Investors were also encouraged by some positive manufacturing news out of Europe.

Caterpillar's belt-tightening paid off in the third quarter as the manufacturer easily beat Wall Street's expectations. Even as new evidence of a global economic slowdown emerged, Caterpillar raised its outlook for earnings for the year.

(The Associated Press contributed to this report.)