3M CEO starts to lay out plans to boost performance
(Reuters) - 3M Co began to unveil on Thursday some of the steps Chief Executive Officer Inge Thulin is making to improve profitability at underperforming units.
Thulin, who took the top job at the diversified U.S. manufacturer in February, said last year that he had identified a handful of units that it would need to fix, sell or close.
The maker of Post-It notes and films used in television screens is merging its security and traffic-safety units, a shift that will result in the elimination about 300 jobs, Thulin told investors on a conference call to discuss fourth-quarter earnings, which met Wall Street forecasts.
He said he did not plan to make drastic changes to 3M's broad lineup of businesses.
"These situations are a few when compared to 3M's overall portfolio," Thulin said, adding that he plans to act quickly to fix businesses that the company identifies as troubled.
"They will not stay under strategic review for long," he said. "We will take action."
'DEGREE OF UNCERTAINTY'
The company, which beat Wall Street's sales targets because of strong demand for office products and from the electronics sector, said it expected to increase earnings by 6 percent to 10 percent this year, despite an uneven world economy.
"There remains a degree of uncertainty as we see some economies growing and others are slower to recover," Thulin said. "Healthcare is doing well, for example, while consumer electronics yet has to recover fully."
3M said fourth-quarter profit had increased to $991 million, or $1.41 per share, from $954 million, or $1.35 per share, a year earlier. The results met the analysts' average estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 4.2 percent to $7.39 billion from $7.09 billion. Wall Street had looked for $7.18 billion.
"Solid organic growth in (the fourth quarter) leaves a good jumping-off point into 2013," said Vertical Research Partners analyst Jeff Sprague.
Shares of 3M rose 3 cents to $99.52 in morning trading on the New York Stock Exchange.
Some of 3M's strongest growth was in China, where sales were up 16 percent, sharply outpacing a 5.2 percent rise in the United States and an 0.6 percent decline in Western Europe, where economies "have stabilized but are not yet growing," Chief Financial Officer David Meline said on the call.
At Wednesday's close, 3M shares had risen about 16 percent over the past year, outpacing the roughly 14 percent rise of the broad Standard & Poor's 500 index.
Major U.S. manufacturers have largely beaten Wall Street's expectations this earnings season. On Wednesday, United Technologies Corp and Textron Inc both reported earnings that came in a penny ahead of consensus forecasts.
(Reporting by Scott Malone in Boston; Editing by Gerald E. McCormick and Jeffrey Benkoe)
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