St. Paul, MN, Jan. 21--3M posted fourth quarter net income of $511 million, or $1.29 per share, versus $381 million, or $0.96 per share, in the fourth quarter a year ago. Excluding non-recurring items in the fourth quarter of 2001, net income increased 31.8% from $387 million in the same period last year. Required changes in goodwill accounting boosted earnings by $0.03 per share.
"Our fourth quarter performance is another example of our team delivering solid results despite difficult economic circumstances," said W. James McNerney, Jr., 3M chairman and CEO. "By driving our five initiatives consistently and methodically across the entire enterprise, we were able to grow earnings by over 30% compared with a year ago. We're particularly pleased that our 3M Acceleration and Six Sigma initiatives are beginning to impact our top line performance."
Worldwide sales in the fourth quarter totaled $4.138 billion, 7.3% higher than the same period last year. Sales volumes increased by 6.0%. Volumes increased 14.2% in transportation, graphics and safety, 4.6% in industrial, 4.5% in consumer and office, 3.6% in health care and 2.2% in electronics and communications. Specialty material was down 1.7%. Currency effects increased worldwide sales by 2.0% while selling prices decreased 0.7% globally.
Sales in the U.S. totaled $1.838 billion, up 1.8% from the same quarter last year. Volumes increased 2.2%, while selling prices decreased 0.4%.
Sales outside the U.S. totaled $2.3 billion, 12.2% higher than the fourth quarter of 2001. Volumes increased 9.4% and changes in the value of the U.S. dollar increased international sales by 3.8%. Selling prices decreased 1.0%. Volumes increased 22% in Asia Pacific driven by a 15% increase in Japan and a 29% increase in the rest of the region. Volumes also increased in Latin America by 6.5%, whereas volumes were flat in Europe.
For the 2002 calendar year, net income was $1.974 billion, or $4.99 per share, compared with $1.430 billion, or $3.58 per share a year ago. Included in these figures are non-recurring after tax costs of $108 million ($0.27 per share) in 2002 and $312 million ($0.78 per share) in 2001. Excluding these items, earnings per share increased 20.6% from the prior year.
Sales for the calendar year totaled $16.332 billion, up 1.7% in U.S. dollars. Volumes improved 1.4% versus the prior year, and selling prices and currency effects increased 2002 sales by 0.2% and 0.1%, respectively.
"Despite challenging economic circumstances and many uncertainties in the marketplace, 3M employees exceeded expectations in 2002 and continued to lay the foundation for our future," McNerney said. "We increased earnings per share over 20% while simultaneously investing over $1 billion in R&D related activities to support future growth opportunities. And we generated significant free cash flow in 2002, which allowed us to: make selected and strategic acquisitions; voluntarily contribute over $1 billion to our global pension plans; pay almost $1 billion in dividends to our shareholders; all while maintaining a strong and healthy balance sheet."
3M also provided its earnings outlook for 2003. For the year, the company expects earnings will be within a range of $5.80 to $6.00 per share, a double digit increase over 2002. First quarter earnings are expected to be between $1.38 and $1.43 per share. In the first quarter of 2002, the company earned $1.14 per share on a reported basis, which included non-recurring costs of $0.09 per share.
