Twin Cities-based 3M and Imation reported profits Monday. 3M's declined, but its share price rose. Imation posted a big jump in profits, but its stock fell.

3M's share price rose 5 percent on the day. Despite the general economic gloom, investors were apparently happy there was no unpleasant surprise on the bottom line.

Profits for the maker of Scotch® tape and 50,000 other products dropped 21 percent in the three months that included the September 11th terror attacks. Excluding one-time costs, the company earned $437 million. That was a penny per share better than Wall Street analysts were predicting on average.

Chief Financial Officer Bob Burgstahler says sales slowed in the last part of September, especially in the company's industrial and consumer and office segments. He says sales have rebounded in October. But Burgstahler says troubles are not confined to those areas. "This is really unprecedented in terms that there's really nowhere to hide other than our health-care business these days. All segments of the industrial economy and every market across the world and exchange rates all lined up negative at the same time. It's very unusual, obviously," Burgstahler said.

3M officials say the ongoing difficult economic environment will hurt 4th-quarter earnings as well. Despite the grim outlook, 3M was the top performing stock in the Dow Jones Industrial Average.

"This may be a different 3M," according to analyst Bill Fiala with Edward Jones in St. Louis, who says 3M's new CEO may be winning the confidence of investors. James McNerney took the reins at the beginning of the year. He brought General Electric's vaunted management approach to 3M's history of innovation.

Fiala says McNerney appears to be more pro-active in taking steps to protect profits. "There's been a lot of talk of bringing GE's great executive model into 3M, but until you start seeing the actual results, a lot of people are a little bit leery. But now you're starting to see the results and that gets people excited again."

While that may please investors, there may be more pain for workers. Last April 3M announced it would cut 5,000 jobs company-wide to deal with what officials described even then as "extremely difficult" U.S. economic conditions. So far 4,200 positions have been cut.

Analysts like Tom Mahowald of American Express Financial Advisors in Minneapolis say more cuts may be coming. "Further employment reductions are likely if we stay in the current difficult economic times. I think businesses from 3M across all industrial companies will be facing these decisions if business does not come back," he said.

3M officials also say there's a push from the top of the company to reduce manufacturing costs by relocating some U.S. production to lower cost areas. Bill Fiala with Edward Jones says GE's history may offer guidance. He says that firm has moved a lot of lower skill work to countries, such as Mexico. "I wouldn't be surprised to see the same trend at 3M - with one caveat: I think 3M's work is maybe a little more skilled labor than GE's on average. So you won't see as big a shift, but I do think you will see more and more of the labor moved overseas or south of the border to lower costs," Fiala said.

Meanwhile, 3M's five-year-old spin-off, Imation, posted a big improvement in third-quarter profits. The data storage and color management company's operating profit reached $13 million. That's up from about $2 million a year ago.

CEO Bill Monahan says cutbacks in advertising after September 11th hurt the color technologies business. "On the data-storage side, we had kind of a short downward hiccup in the demand of the business after September 11th," he said. "But the business very quickly got back on traction, providing storage support and back-up support and archival support to all of our customers, which became even more important to them after the attack, because they're more concerned now about security than they had been in the past."

Imation reaffirmed its projection that operating income will grow 5 to 10 percent this year, but says sales for the year will decline as much as 7 percent. The company's share price dropped about 4 percent.