3M Shares Fall on Disappointing Sales Growth
Diversified manufacturer 3M
The company , whose products include Scotch tape and Post-It notes, said during a conference call that its target of 5 to 8 percent volume growth for the year, excluding the effect of the weak dollar, was "unrealistic" in "today's economic world."
"I think in the current economic situation getting to five to eight is a nice aspiration, but probably unlikely," the company said on a conference call while affirming its 10 percent 2008 earnings-growth outlook.
Foreign currency translation accounted for 6.1 percentage points of the 8.9 percent rise in quarterly sales to $6.5 billion.
The quarter's total sales topped analysts' average forecast of $6.32 billion, but organic growth disappointed, falling domestically and coming in weaker-than-expected internationally as well, Morningstar analyst Adam Fleck said.
"A lot of the growth this quarter was from currency translation," Fleck said. "That's positive for the company but not as positive as true organic growth."
The St. Paul, Minnesota-based company repeated its forecast for full-year earnings growth of at least 10 percent.
First-quarter net income was $988 million, or $1.38 per share. Analysts' average forecast was $1.35 per share, according to Reuters Estimates.
The company earned $1.4 billion, or $1.85 per share, a year earlier, including a one-time gain of 57 cents per share from the sale of its branded drug business in Europe.
A 10 percent increase in full-year earnings, before special items, would mean a profit of $5.48 per share. Analysts' average forecast is $5.47.
3M's shares were down 3.2 percent at $78.03 during morning trade on the New York Stock Exchange.
In the past 52 weeks, the shares have traded in a range of $97 to $72.05.