- Optical sales were down 16% with profits down 50%.
- There were positive sales growth in Traffic Safety Systems and Commercial Graphics, which was more than offset by lower-than-expected sales in Optical Systems.

- Commercial graphics business gained traction with new ‘extreme vehicle film wraps’ that conform and adhere to concave or deep channeled surfaces.
- Projection Systems business launched the new 3M Mobile Projection Technology, an ultra-compact, LED-illuminated projection engine designed for personal electronic devices.
- Operating profits were $187 million, with a 21.5% margin.

Safety, Security and Protection Services sales were $859 million, up 13.4%.

- Sales growth in local currency was 6.4%, including 1.9% from acquisitions.
- Broad-based sales growth was led by respiratory protection, protective window films and cleaning solutions for commercial buildings, and corrosion protection products.
- There was double-digit sales growth in Europe, Asia Pacific and Latin America.

- Track and Trace business extended its innovative product line with a new Dynatel Pipe/Cable Locator, specially designed for locating underground pipes.
- Profits were up 12.4% to $204 million, with operating margins of 23.7%.

Consumer and Office sales were up 2.6% to $838 million.

- Local-currency sales declined 2.5%, largely due to slower sales in the U.S. retail market.
- There was positive local-currency growth across Asia Pacific, Europe and Latin America.
- Profits were $166 million, with operating margins of 19.8%.

Electro and Communications sales increased 9.2% to $725 million.

- Local-currency growth was 3.3%, including one point from acquisitions.
- There was positive sales growth in all major geographies, led by double-digit gains in Asia Pacific and Latin America.
- There was double-digit local-currency sales growth in two largest businesses: Electrical Markets and Electronics Markets Materials.

- Electronic Solutions introduced a new lightweight, handheld electrostatic discharge detector.
- The company announced a partnership with Companhia de Transmissao de Energia Electrica Paulista (CTEEP), one of Brazil’s largest electric utilities, where 3M will install its Aluminum Conductor Composite Reinforced (ACCR) to upgrade key elements of the CTEEP transmission network.
- Operating profits were up 13.6% to $146 million, with margins exceeding 20%, excluding special items in the first quarter of 2007.

Fiscal 2007 Outlook

- The company continues to expect full-year 2008 earnings to increase a minimum of 10% over 2007 earnings-per-share of $4.98, which excludes special items.
- 3M also expects operating margins of 22.5 to 23.5% and a tax rate of 31.5 to 32.5% for the year.
- The company expects annual capital expenditures to be in the range of $1.3 to $1.4 billion, down from a previous forecast of $1.4 to $1.5 billion.

Key questions from the first quarter earnings call conducted by 3M Co. on April 24, 2008.

John Inch (Merrill Lynch): The US organic growth was down 2.8%, what do you think the growth would have been if you had not been over the past few quarters putting in place your growth spending initiatives?

George W. Buckley: It is difficult to give you a precise answer to that question. The new product vitality index that we mentioned is moving upwards about two points each year.

John Inch (Merrill Lynch): The EPS contribution looks good. How are you thinking about currency potentially moving the other way?

Patrick D. Campbell: We never bank on either a foreign exchange or pension returns from a long-term planning perspective. We view those being more short-term in nature. We plan the business more around steady state operational basis. What we try to do is when we have the benefits of foreign exchange and it is a difficult number to give you hands on, I can give you a technically foreign exchange number, but there is other more macroeconomic impacts that affect business results volume and so forth that make it harder to come up with a good net number. We are seeing on the commodity side some significant increases that we are trying to address through price increases. What we are trying to do is while the currency is favorable for us, is to continue to invest in our businesses, so as currency does move, which eventually it well at some point in time that what we have done is we have got a better growth base in the rest of our businesses.

Shannon O''Callaghan (Lehman Brothers): Are you still thinking the 5% to 8% of organic growth for the year is achievable?

Patrick D. Campbell: In the current economic situation getting to 5% to 8% is a nice aspiration but probably unlikely. We are not throwing that away from where we want to be but it is unrealistic in today''s economic world and on top of that with the situation that we are in with Optical, just does not make that a realistic assessment. In a word, you can be guaranteed that we are fighting for every piece of volume that we possibly can in today''s economy but importantly, I want to make sure that you do not connect, we are saying we are going to give you a 10% plus earnings growth.

Shannon O''Callaghan (Lehman Brothers): What is the updated view on the Display and Graphics margin target?