[1/2]The 3M logo is seen at the global headquarters in Maplewood, Minnesota, USA on March 4, 2020. Portal/Nicholas Pfosi/File Photo
July 25 (Portal) – US industrial conglomerate 3M Co (MMM.N) on Tuesday raised its full-year earnings forecast and reported better-than-expected quarterly results on higher prices and cost-cutting measures, taking its shares to a four-month high of nearly 6%.
3M, maker of electronic displays for smartphones and tablets, raised prices to offset high raw material and labor costs. The company also reduced its global workforce by 10% this year as demand for consumer electronics slowed.
The diversified manufacturer said in April it expects the reorganization to save up to $900 million through 2025 as it shifts focus to high-growth businesses, including auto electrification and home improvement, and prioritizes emerging growth areas like air conditioning technology and others.
According to Refinitiv IBES, the company reported adjusted sales of $7.99 billion for the fourth quarter ended June 30, beating analysts’ average expectation of $7.87 billion.
“Improving supply chain dynamics and MMM’s earlier restructuring and productivity efforts have started to gain momentum, and we believe this is reflected in the company’s relatively better margin performance for 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 a year-ago profit as the company was hit by a $10.3 billion settlement related to water pollution claims linked to “perpetual chemicals.”
The company has to deal with thousands of lawsuits related to its use of “forever chemicals” linked to cancer, hormonal imbalances and environmental damage, and defective earplugs that caused hearing loss in US service members.
Still, the company expects full-year earnings of between $8.60 and $9.10 per share, up from the previous guidance of $8.50 to $9.
The company reported adjusted earnings of $2.17 per share for the fourth quarter, beating Street’s estimate of $1.72.
Reporting by Kannaki Deka in Bengaluru; Edited by Shinjini Ganguli
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