3M raises full-year profit forecast as cost-cut measures pay off By Reuters

Posted by Kanaki Deka

(Reuters) – U.S. industrial group 3M Co on Tuesday raised its full-year profit forecast and reported better-than-expected quarterly results supported by higher prices and cost-cutting measures, sending its shares to a four-month high of nearly 6 percent.

3M, which makes electronic displays for smartphones and tablets, has raised prices to offset higher raw material and labor costs. It also cut its total global workforce by 10% this year as consumer electronics demand slumps.

The diversified manufacturer said in April that it expects to save up to $900 million through restructuring by 2025 as the focus shifts to high-growth businesses, including auto electrification and home improvement, and prioritizes emerging growth areas such as climate technology and others.

It reported adjusted revenue of $7.99 billion in the fourth quarter ended June 30, beating analysts’ average forecast of $7.87 billion, according to IBES Refinitiv.

“Improving supply chain dynamics as well as MMM’s prior restructuring and productivity measures have begun to gain some momentum and we believe it is reflected in the company’s relatively better margin performance in the quarter,” Citi analysts said in a note.

However, the company noted that it continues to see a slow recovery in China as demand for consumer electronics remains weak.

3M reported a fourth-quarter loss compared to last year’s profit, taking a hit from a $10.3 billion settlement related to “Chemicals Forever” water pollution claims.

The company faces thousands of lawsuits related to its use of “forever chemicals” linked to cancer, hormonal imbalance, and environmental damage, and defective earplugs that have caused hearing loss to members of the US military.

However, the company expects full-year profit of $8.60 to $9.10 per share, up from previous guidance of $8.50 to $9.

It reported fourth-quarter adjusted earnings of $2.17 per share, above Street’s estimate of $1.72.