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3M also increased its full-year earnings forecast, helping spur its stock to a three-month high.

"This is an example of good execution in a tough environment," said Jeff Graff, a research analyst at Victory Capital Management. "For the last couple of years, the company has really stepped up its cost-cutting initiatives and focused on working capital reductions."

The conglomerate, which also makes Scotch tape, pharmaceuticals and industrial adhesives, reported net income of $619 million, or $1.56 a share, compared with $466 million, or $1.18 a share, a year earlier. Excluding items in the year-ago period, it would have earned $539 million or $1.36 a share.

Results exceeded the company's April earnings forecast of $1.47 to $1.53 a share. Analysts on average were expecting $1.51, according to Reuters Research, a unit of Reuters Plc.

Sales rose more than 10 percent to $4.58 billion, with U.S. sales up about 2 percent and international up almost 17 percent.

The weakness of the U.S. dollar, especially against the euro, helped 3M's results. Stronger foreign currency exchange rates mean sales from those countries translate into more U.S. dollars for financial reporting purposes.

The St. Paul, Minnesota-based company told analysts and reporters on a conference call that currency-rate changes accounted for 8 cents of the 20-cent rise in earnings per share from a year ago. It also accounted for 4.6 percentage points of the sales gain.

The company also said it is continuing to rein in costs and improve productivity through its Six Sigma quality improvement program and other efforts. 3M expects savings from the programs to total about $300 million in 2003 and 2004.

Six of 3M's seven divisions reported higher sales in the most recent quarter, and five had higher operating income.

Display and graphics, which makes a film that boosts the brightness of displays on cellular phones and handheld computers, reported sales volume increased almost 22 percent and its operating income rose 43 percent.

At its safety, security and protection services division, sales rose 11 percent as the SARS virus drove demand for its respiratory masks.

Sales in the transportation division rose 7.1 percent, while health care was up 5.6 percent.

Consumer and office sales increased 3 percent, but operating income declined 0.4 percent as office supply sales were weak, which 3M attributed to company cutbacks due to the soft U.S. economy.

Industrial continued to struggle, with sales up 0.1 percent and operating income down more than 22 percent. Electronics and telecommunications continues to struggle on weak demand from the telecommunications industry.

On a geographic basis, Asia-Pacific turned in the strongest performance as sales volume increased almost 18 percent.

The company said it remains cautious about the global economic outlook, but is confident it can continue to boost sales and improve productivity.

For the third quarter, 3M said it expects earnings of $1.56 to $1.60 a share. Analysts' estimates ranged from $1.49 to $1.60 for an average of $1.53, according to Reuters Research.

The company boosted its full-year outlook for net income to between $5.75 and $5.90 per share. It previously had estimated earnings per share between $5.65 and $5.85.