3M Co(NYSE:MMM) has decided to sober down its expectations for profit for this year. The company has cited the economic situation as the primary reason for doing so. Global economy has been undergoing a sluggish period, and it is this reason which makes this company not aim too high for its profits.
The company manufactures a variety of things, from stationery, to the coatings on traffic signals. From scotch tape to LCD screens, clearly, 3M has a variety of products to sell. The reason this company is an economic bellwether is because of this variety of products as well as its reach, which extends very far. This company has a worldwide reach. Inge Thulin, the CEO of 3M has stated, however, that the company will be suffering from a slight decrease in profits because of the worldwide situation of the economy, which does not seem to exhibit any dynamic growth.
The CEO also pointed out the market situation was less pleasant during the third fiscal quarters this year. Thulin also stated that by the looks of it, the situation will probably not become better by the end of 2012. Therefore, keeping this in mind, the profits are sure to suffer too. The company was previously hoping to earn about $6.35 to $6.50 from each share, but the expectations have now been lowered to $6.27 to $6.25. Analysts, on the other hand, had been rooting for earnings of $6.40 per share from the company. The currency rates and the issue of conversion is also another issue which will play on the revenue, and make it flat this year.
The company often deals with the “bolt-on” acquisitions, but of late, they have been much more careful, and prudent with their decisions, specially due to the economic conditions. The recent quarter results saw a rise in income by 6/7 percent. The net income stands to be $1.16 billion, which is a rise from the corresponding quarter of last year. The revenue, however, has fallen down. This is mainly due to the foreign exchange and the rates put up on currency conversion.