Sales of flat-screen televisions rebounded in the third quarter following a glut blamed on overstocking before the football world cup, 3M said on Friday.
The diversified US manufacturing and technology group is one of the world’s largest producers of the optical films used to produce liquid crystal displays for TV screens and computer monitors, and it said television sales accelerated through the quarter ahead of the key holiday selling period.
George Buckley, 3M’s chairman and chief executive, said production problems had also been largely resolved, helping margins to improve despite a continuing fall in selling prices. “The LCD market is growing by leaps and bounds,” added Pat Campbell, 3M’s chief financial officer.
The comments will help improve sentiment in the television sector following a recent downbeat report from LG Philips LCD, the Korean-Dutch joint venture which is one of the largest producer of flat-screen sets.
The rebound in optical films, part of 3M’s display and graphics unit, helped the company report its third consecutive quarter of record revenue, with sales rising 8.8 per cent to $5.9bn in the three months to September 30. Local-currency sales were 7.3 per cent higher – around 60 per cent of 3M’s business is outside – and are forecast to rise 4-8 per cent in the final quarter.
Mr Buckley said the group planned to continue productivity improvements and acquisitions to drive growth, while the company suggested it was progressing with the sale of its branded pharmaceuticals business, despite speculation that offer prices were viewed as too low.
“You are going to see steady stream of smaller acquisitions,” said Mr Buckley, who arrived at the Minneapolis-St Paul-based group last December. He also said that “one or two” larger deals could not be ruled out, adding that some transactions on this scale had fallen through.
Net profits rose from $840m to $894m in the quarter, with earnings per share of $1.17 slightly ahead of analysts’ consensus expectations. The auto sector was the one weakness identified by the company, which produces components for the sector. “New car builds continue to remain soft, particularly in the US,” said Mr Campbell.