3M Co. announced Wednesday that it will make fewer acquisitions and may miss analyst earnings expectations as a weaker global economy continues to take its toll on the Maplewood conglomerate.
This is the second time this year that 3M has had to rein in analysts' excited profit estimates. The maker of Scotch Tape and Post-it Notes tightened its full-year 2012 guidance in October, citing a recession in Europe and slowing growth in Asia.
CEO Inge Thulin said he now expects earnings will grow about 8 percent in 2013 to land in the range of $6.70 to $6.95 a share. The range's midpoint fell below analysts' average estimate of $6.85 per share. The growth rate is also below his average five-year growth goal of 10 percent.
Still, Thulin remained optimistic about next year. "Our unique combination of technology, manufacturing prowess and global capability, along with inherent operational excellence, will enable us to once again grow sales and profits."
Thulin told analysts during a conference call Wednesday that he expects 3M will spend $1 billion to $2 billion on "slightly bigger ... and fewer" acquisitions in 2013. That news comes on the heels of 3M's just-completed $860 million purchase of the California advanced-ceramics firm Ceradyne Inc.
Shareholders reacted negatively to the latest restrained guidance. 3M's stock, which has been running hot lately, fell 56 cents to close at $93.12 a share Wednesday.
But Thulin was not put off and said sales of existing products should grow 2 to 5 percent. He said he has identified several businesses within the company that need work to improve results. And he noted that 3M is expanding its R&D, will open a new lab in Maplewood and recently broke ground on a new plant and distribution center in Turkey.
Last month, Thulin unveiled a five-year plan that will pounce on mega-trends like battery-operated mobile devices, medical technology and energy and have a deeper penetration in developing nations. He also expects brisk sales of popular products ranging from airplane sealants to new components that protect cell phones.
On Wednesday, Deutsche Bank Equity Research Analyst David Begleiter noted 3M's plans to invest $1.7 billion on factories, equipment and other production improvement around the world.
"It's not as intensive as it was back in '08 and '09 on a percentage-of-sales basis. But it's the highest number of all time," Begleiter said.
Dee DePass • 612-673-7725