3M Sees 2014 Earnings In Line With View, Boosts Dividend By 35%

(RTTNews) - Diversified technology company 3M Co. (MMM) on Tuesday forecast earnings for fiscal 2014 in line with analysts' estimates and increased the quarterly dividend by 35 percent for the first quarter of 2014. The company also affirmed its long-term sales and earnings growth objectives.

3M's board of directors declared a dividend on the company's common stock of 85.5 cents per share for the first quarter of 2014, representing a 35 percent increase over the quarterly dividend paid in 2013. The dividend is payable on March 12, 2014, to shareholders of record at the close of business on February 14, 2014.

St. Paul, Minnesota-based 3M said that at its meeting with institutional investors and analysts later today, the company will provide an update on its five-year plan and introduce its fiscal 2014 outlook.

For fiscal 2014, 3M forecasts earnings in a range of $7.30 to $7.55 per share, with organic local currency sales growth of 3 to 6 percent. On average, sixteen analysts polled by Thomson Reuters expect the company to report earnings of $7.40 per share for the year on revenues of $32.63 billion. Analysts' estimates typically exclude special items.

At the investor meeting today, 3M Chairman, President and CEO Inge Thulin will outline the company's financial objectives for the period from 2013 to 2017. For the period, the company expects 9 to 11 percent growth in earnings per share, 4 to 6 percent organic revenue growth, about 20 percent return on invested capital, and about 100 percent free cash flow conversion.

Thulin will also discuss the strength of 3M's business model, driven by three key strategic levers - active portfolio management, investing in innovation, and business transformation. According to 3M, the strategic levers combined with more aggressive capital deployment will drive enhanced value creation.

3M's Senior Vice President and CFO David Meline will describe how the company is managing toward an enhanced capital structure strategy and increased capital deployment.

3M will continue to invest in capital expenditures as well as research and development to support organic growth. To augment organic growth, 3M plans to invest between $5 billion and $10 billion for acquisitions through 2017. The company noted that acquisition investments could exceed this range given the right strategic opportunity, with "multi-billion dollar transactions possible".

Further, 3M said it now expects to spend $17 billion to $22 billion on gross share repurchases for the period from 2013 to 2017, compared to its previously expected range of $7.5 billion to $15 billion.

In a separate statement, 3M Electronic Solutions Division announced the introduction of its new 3M Patterned Metal Mesh Film. The company said it will supply metal mesh film to other touch panel sensor makers to help meet growing market demand for next-generation touch screens.

3M Electronic Solutions Division also announced the launch of its new unpatterned indium tin oxide or ITO film that offers an alternative source for high-quality, high-volume touch sensor films. The film can be used in touch-enabled electronic devices, such as smart phones, tablets, notebooks and all-in-one computers.

Further, 3M announced the launch of a new touch sensor film, 3M Patterned Silver Nanowire Film. The company plans to ramp up its total global touch sensor film manufacturing capacity to more than 600,000 square meters per month in 2014. This will enable to meet growing demand for touch-enabled displays, including curved or wrapped bezels.

In late October, 3M reported a 6 percent increase in profit for the third quarter from last year, reflecting volume growth, improved prices and sales growth amid increases across business groups and regions.

The company's net income for the third quarter was $1.23 billion or $1.78 per share, higher than $1.16 billion or $1.65 per share in the prior-year period. Net sales for the quarter also grew 6 percent to $7.92 billion from $7.50 billion in the same quarter last year.

In Tuesday's regular session, MMM is trading at $131.48, up $3.82 or 2.99 percent on a volume of 710,700 shares.