Diversified manufacturer 3M (MMM - Free Analyst Report) reported second-quarter share earnings of $1.54, notably better than the $1.12 recorded in the year-earlier period and the $1.30 that we had estimated. The good performance was thanks to improved sales across all business and geographic regions, with particular strength experienced at the Electro & Communications and Display & Graphics segments, which posted top-line gains of more than 30%. Quarterly comparisons ought to be strong throughout this year and next as economies around the world, especially those in Asia, continue to improve. We have raised our 2010 share-earnings estimate by $0.25, to $5.75, which is the top end of management's guided range.
3M is widely considered to be a bellwether of global economic health due to its vast geographic and business diversification. The company's return on capital has consistently surpassed 20% and now sits at 24%, which is one of the highest in the diversified chemical industry, owing to an optimal financial leverage and prudent working capital management policies. We believe 3M's solid performance will continue in the years ahead, thanks to its renewed focus on innovation, which stands to help lift the top and bottom lines over the long haul.
About the Company: 3M, a component of the Dow Jones Industrial Average, is a diversified manufacturer that sells more than 50,000 products in 60 countries. Its six business segments include: Industrial & Transportation (31% of 2009 revenues); Display & Graphics (14%); Healthcare (19%); Consumer & Office (15%); Electro & Communications (9%); and Safety, Security & Protection (12%).