International sales boost 3M 2nd-quarter results

3M, which has broad exposure to the U.S. economy, also announced a 20 percent staff reduction in its struggling display and graphics business mostly in the U.S., with some job cuts overseas. The company believes its cost cutting efforts and consolidation its Asia operations combined will save roughly $30 million on an annual basis.

During the three-month period ended June 30, the Maplewood, Minn.-based company earned $945 million, or $1.33 per share, compared with $917 million, or $1.25 per share a year earlier. The latest results included a charge of 6 cents per share related to the sale of a software subsidiary, along with charges related to employee reductions in 3M's Industrial Transportation manufacturing facility in the U.K.

Excluding the special items, 3M said it earned $1.39 per share in the most recent quarter. Net sales rose to $6.74 billion, up 9.7 percent from $6.14 billion a year ago.

Analysts polled by Thomson Financial, on average, expected earnings of $1.35 per share on net sales of $6.69 billion.

Chief Executive George Buckley said the company's recent strategy to reinvest in its core and international businesses made the latest quarter's results possible, despite rising commodity prices and a challenging U.S. economic environment. Raw materials rose between 3 percent to 4 percent over the past year, according to the company.

The company benefited from the weak dollar, as two-thirds of 3M sales came from overseas. Sales were up 32 percent in Latin America, 18 percent in Europe, 14 percent in Canada, and excluding certain items, up 17 percent in Asia Pacific. Currency exchange rates boosted 3M's sales growth in the quarter by 5.4 percentage points.

Of its six core business, 3M reported double-digit revenue growth in three of its largest, including Industrial Transportation, Health Care and Safety, Security and Protection Services.

3M's largest division, Industrial and Transportation segment, saw operating profits rise 18.1 percent to $425 million. The company said a 15.5 percent rise in revenue was led by sales of industrial adhesive tape, abrasives and its closure business for hygiene products.

Its Health Care business saw double-digit revenue growth of 13.1 percent, driven primarily by demand for its orthodontics and dental oral care products.