3M Cuts Profit Forecasts

3M Co. (NYSE:MMM) on Wednesday announced profits that fell below analyst forecast and also downgraded its profit forecast for 2011.

The stocks of the company fell the lowest since 2008, after the announcement. The Earnings for the ful year for the Scotch Brite and LCD television parts manufacturer, are forecasted to be around $5.85 to $5.95 per share. Earlier the company had predicted that the full year earnings per share will be between $6.10 to $6.25, including pension benefit costs that will be around 22 cents.

3M reported in its financial statement that the sales of electronics are slowing down, after a period of growth seen in the previous quarters. Before today the stocks of the company rose by 14 percent. In the last quarter the company experienced the effect of slowdown seen in China, Brazil, India and other developing countries. The demand from these countries for the electronic components such as LCD display’s for television is slowing down, because of lower consumer demand.

Investors and analysts were disappointed with the results of the company. However most of the analysts have recommended buying the shares of the company, with the forecast for a recovery in the long term.

The stocks of the Scotch Brite maker fell by 6.3 percent to around $77.04 on the New York stock Exchange at the end of the day. This is the largest drop experienced by 3M since Dec 1. The stocks have fallen by around 11 percent in the past 12 months.

The 3^rd quarter net income for 3M fell by 1.6 percent to around $1.1 billion, which translates into $1.52 per share. In the same quarter last year 3M reported a net income of $1.11 billion or around $1.53 per share. The sales increased by 9.6 percent to around $7.50 billion, lower than various analyst estimates of $7.78 billion.

George W. Buckley, the Chief Executive Officer of 3M said that the third quarter financial figures experienced the same softening that was experienced in the late second quarter. According to company predictions the slow growth will continue through the remaining part of this year.

Other industrial companies such as Honeywell International Inc., United Technologies Corp. and Danaher Corp. boosted the earnings after reporting health third quarter profits, which were higher than analyst expectations.

The sales of LCD television screens were lower in Western Eurpoe, where the governments announced austerity measures. The revenue from the graphics and display unit fell by 12 percent. Buckley will be leaving 3M by next year in February. He is aiming to cut the slowed sales by cutting costs.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.