Advertisement
Markets

3M: A Brighter View

A rebound in flat-panel film coatings was reassuring to Wall Street.

3M is a giant conglomerate that makes more than 55,000 products. But for the past two quarters, investors have focused closely on one that it doesn't make: flat-panel televisions.

Weak sales of 3M's liquid crystal display screens, which go into TVs and computer monitors, contributed to poor second-quarter results, dragging down 3M's shares in July to a three-year low. On October 20, however, 3M shares (symbol MMM) rose 2.7%, to $78.47, after the St. Paul, Minn.-based manufacturer's third-quarter earnings report showed signs of rebounding flat-panel sales.

Advertisement - Article continues below

3M makes film coatings that increase the brightness of flat-panel screens and make the screens easier to see in different lighting conditions. The film-coatings business is part of 3M's displays and graphics segment, which accounts for about 17% of 3M's $21 billion in annual sales. Third-quarter sales for the unit were up 9% from the previous quarter, and earnings were up 25%. In a conference call with analysts, 3M chief executive George Buckley said the company had solved the manufacturing problems that had plagued the business in the second quarter. He also said flat-panel screen inventories returned to normal levels in the third quarter because of strong demand by consumers for flat-panel TVs and computer monitors.

Advertisement
Advertisement - Article continues below

The rebound in the film-coatings business was reassuring to analysts, who have been looking for indications that 3M could generate healthy growth in its existing businesses. Prudential Securities analyst Nicholas Heymann says internal growth has recently been in the 7% to 9% range, up from 1.5% to 5% over the past six quarters. As investors become more convinced that the company can maintain that range, he says, its stock price should return to its May high of $88. After the release of the earnings report, he raised his six- to nine-month price target by $7, to $92.

Overall, 3M's third-quarter sales rose 9%, to $5.9 billion, ahead of the $5.8 billion analysts were expecting. Net income of $1.18 a share was up from $1.08 a year earlier, beating analysts' estimates of $1.12. The company forecast fourth-quarter profits of $1.10 to $1.16.

3M's safety, security and protection business, which makes everything from radio frequency inventory tags to cleaning products, was the best performer in the third quarter. Sales rose 17%.

Advertisement

Most Popular

What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
Tax Changes and Key Amounts for the 2020 Tax Year
tax law

Tax Changes and Key Amounts for the 2020 Tax Year

Americans are facing a long list of tax changes for the 2020 tax year...and it's never too early to start thinking about next year's return.
June 22, 2020
10 Tax Breaks for the Middle Class
tax deductions

10 Tax Breaks for the Middle Class

Tax breaks aren't just for the rich. There are plenty of them that are only available to middle- and low-income Americans.
June 30, 2020

Recommended

Closing Bell 7/8/20: Tech Stocks Lead Wall Street Forward Again
Markets

Closing Bell 7/8/20: Tech Stocks Lead Wall Street Forward Again

U.S coronavirus cases continue to spike, but Apple helped lead another Big Tech rally to drive the major indices higher Wednesday.
July 8, 2020
Closing Bell 7/7/20: Nasdaq's 5-Day Win Streak Snapped
Markets

Closing Bell 7/7/20: Nasdaq's 5-Day Win Streak Snapped

A broad-market downturn Tuesday ended the Nasdaq's five-day win streak and sent economically sensitive industries to deep losses.
July 7, 2020
The Bull Run Is Over: It’s Time To Replace Luck with a Plan
investing

The Bull Run Is Over: It’s Time To Replace Luck with a Plan

It’s not hard for investors to look good during a bull market, but now comes the real test.
July 7, 2020
Closing Bell 7/6/20: U.S. Stocks Grab the Baton From China
Markets

Closing Bell 7/6/20: U.S. Stocks Grab the Baton From China

A surge in Chinese equities, as well as a massive improvement in services-sector data, lifted U.S. stocks and sent the Nasdaq to new highs Monday.
July 6, 2020