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3M (MMM) Q4 2012 Earnings Preview

 January 22, 2013 04:57 PM

(By Balachander) Diversified technology company 3M Co. (NYSE: MMM) is expected to post a 4 percent increase in quarterly earnings per share (EPS) on an increase in revenue from new products.

Wall Street analysts, on average, expect MMM to earn $1.41 a share and revenue growth of 1.30 percent to $7.18 billion for the fourth quarter ended December.

3M, with 2011 sales of $29.61 billion, operates in six business segments: Consumer and Office, Electro and Communications, Health Care, Display and Graphics, Safety, Security and Protection Services and Industrial and Transportation.

The company last month affirmed its 2012 EPS forecast of $6.27 to $6.35, while Wall Street analysts expect $6.32 on revenue of $29.8 billion. 3M anticipates 2013 EPS of $6.70 to $6.95, while analysts expect $6.85.

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"While 3M's innovation-driven growth model remains strong with sales from new products a record 33 percent in '12E (vs 32 percent in '11 and 21 percent in '05), with global growth remaining subdued and valuation a fair 13.6x '13E EPS, we maintain our Hold," Deutsche Bank wrote in a note last month.

During the current month, four analysts have recommended MMM as a "Strong Buy" and three analysts gave "Buy" rating,  while 10 analysts gave a "Hold" rating on the stock. There is no analyst who recommends "Sell" on the stock.

For the third quarter, the company's EPS increased 9 percent to $1.65, matching Wall Street projections. Earnings attributable to 3M grew 7.4 percent to $1.16 billion. Net sales declined 0.5 percent to $7.49 billion, while consensus estimate called in for a growth of 1.30 percent. Total operating income margins were 22.4 percent, with all of MMM's six business segments recording above 21 percent.

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Shares have been trading in the 52-week range of $81.99 to $99.22.

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