3M today announced second quarter earnings of $1.12 per share on sales of $5.7 billion, with operating income margins of 20.8%. Sales and per-share earnings declined 15.1% and 15.8% year-on-year, respectively. On a sequential basis, sales and per-share earnings increased 12.4% and 51.4%, respectively, and operating income margins improved by 5 percentage points. Free cash flow conversion was 160% of net income, with strong contributions from reduced capital expenditures and lower inventory levels.

Excluding special items, net income was $843 million and earnings were $1.20 per share, down 14.9% and 13.7%, respectively. Operating income margins increased 50 basis points year-on-year to 22.6%. 3M’s Health Care and Consumer and Office businesses each delivered double-digit year-on-year profit improvements.

“We drove strong results in the second quarter, exceeding our own expectations for profits, sales and free cash flow,” said George W. Buckley, 3M chairman, president and CEO. “Operating discipline was key to the quarter, as discretionary spending was well-controlled and restructuring actions proceeded according to plan. 3M employees across the globe are undaunted in facing this recession, and I applaud their efforts.”

Buckley said that while sales were helped by improved demand for consumer electronics and respiratory products used to prevent the spread of the H1N1 virus, 3M’s sound operational strategy and early actions to address the recession were at the core of the strong Q2 performance.

“Our second-quarter results give us confidence in both our plan and in our ability to execute that plan,” Buckley continued. “While the exact shape and timing of the economic recovery is unknown, we will move ahead efficiently and energetically so that 3M emerges from the downturn an even stronger company.”

The company raised its 2009 sales expectations. 3M now expects 2009 organic sales volume to decline between 10% and 13% versus a previous planning assumption of -11% to -15%. The company also expects 2009 full-year earnings to be in the range of $4.10 to $4.30 per share, versus a previous range of $3.90 to $4.30. All estimates quoted exclude special items.

For the full press release, clickhere.