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Dow Jones Business News
3M CFO: No Signs Of Recovery In US Industrial Eco
Monday October 20, 12:48 pm ET
By Erik Ahlberg, Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)--Conglomerate 3M Co. hasn't yet seen any evidence of a turnaround in the U.S. manufacturing economy, despite strong international sales gains during the third quarter, the company's chief financial officer said Monday.
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Patrick D. Campbell told analysts during a conference call related to the company's third-quarter earnings report that the company "remains very cautious" in its planning for 2004. He said a quick, broad-based recovery probably isn't in the cards any time soon.
3M, of St. Paul, Minn., earlier Monday reported a 21.6% gain in third-quarter net income to $663 million, or 83 cents a share, compared with $545 million, or 69 cents a share, in the same period last year.
The results beat analysts' consensus estimate by four cents a share, according to Thomson First Call (News - Websites) .
Sales increased 11.4% to $4.6 billion from $4.1 billion.
Campbell, the CFO, said 3M is experiencing some strains in the manufacturing of some of its top-selling goods, such as optical films and respirator products. But the company is "spending money" to alleviate bottlenecks and increase capacity for future quarters, he said.
3M's pension assets have returned almost 19% year-to-date, and the company continues to assume a 9% return on assets for future years, Campbell said. The bond market "wasn't particularly friendly" this year, pushing the discount rate to 6%, down from 6.75% in 2002, he said.
During the third quarter, 3M made a $600 million contribution to its U.S. pension plan. As of Sept. 30, the funded status of the U.S. plan was at 86%, compared with 82% last year, Campbell said.
3M during the quarter also increased its legal reserves for asbestos and breast implant litigation by $20 million and $15 million, respectively. The company offset $16 million and $13.5 million of the increases by bumping up insurance receivables, Campbell said. |
