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3M Earnings Up 33 Percent, Boosts Outlook

July 21, 2003

MAPLEWOOD, Minn. (AP) _ Second-quarter earnings at 3M Co. soared 33 percent on stronger sales, improvements in productivity and a weaker U.S. dollar, prompting the company to raise its earnings outlook for the rest of the year.

3M on Monday reported income of $619 million, or $1.56 a share, for the quarter ended June 30, up from $466 million, $1.18 a share, a year earlier.

The consensus estimate of analysts surveyed by Thomson First Call was $1.51 a share. 3M shares were up $6.17 to close at $136.35 on the New York Stock Exchange.

Sales rose 10 percent to $4.58 billion from $4.16 billion.

``Sales reached an all-time high, and both net income and earnings per share were the highest of any second quarter in 3M’s 100-year-plus history,″ said W. James McNerney Jr., chairman and chief executive. ``Our corporate initiatives _ aimed at driving higher top-line growth, productivity and free cash flow _ are making a real difference.″

The Maplewood-based company’s product diversity helped the bottom line. While its industrial and telecommunications businesses were down, demand for health care and electronic display products was strong, chief financial officer Pat Campbell told analysts in a conference call.

3M increased its earnings outlook for the third quarter and full year.

The company now expects third-quarter earnings to range from $1.56 to $1.60 per share, with full-year earnings ranging from $5.90 to $6.05 a share, excluding a one-time after-tax charge of $58 million taken in the first quarter related to settlement of a lawsuit filed by LePage’s Inc.

Thomson First Call analysts had predicted full-year earnings of $5.91 a share.

``Clearly, it is prudent to maintain a cautious outlook on global economic growth and to gear our plans accordingly,″ McNerney said. ``At the same time, we remain confident in our ability to improve every aspect of our company.″

For the first six months, 3M earned $1.12 billion, or $2.83 a share, up 22 percent from $918 million, or $2.32 a share, in the first half of 2002. Sales rose to $8.90 billion, from $8.05 billion.

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On the Net: http://www.3M.com

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