3M Stock Higher After Q2 Earnings Beat, 2023 Profit Outlook Lift
"We are progressing the planned spin of our Health Care business and addressing a significant portion of PFAS litigation," said CEO Mike Roman.
Updated at 8:30 am EDT
3M Co. (MMM) - Get Free Report posted better-than-expected second quarter earnings Tuesday, while nudging its full-year profit forecast higher, following a multi-billion settlement linked to the use of per- and polyfluoroalkyl substances, 'forever chemicals'.
3M said adjusted profits for the three months ending in June were pegged at $2.17 per share, down 12.5% from the same period last year but well ahead of the Street consensus forecast of $1.72 per share. Group revenues, 3M said, fell 4.6% to $8.3 billion, but again topped analysts' forecasts of a $7.87 billion tally. Organic sales were down 2.2%.
Looking into the coming financial year, 3M said it now sees adjusted earnings in the region of $8.60 to $9.10 share, compared to the Refinitiv forecast of $8.50 to $9.00 per share, with adjusted sales falling between 5% and 1%.
"In the second quarter, the actions we took to strengthen our supply chain and restructure the company led to improved service for customers, reduced costs across 3M, and better than expected margins and cash flow," said CEO Mike Roman.
"As we execute our strategy, we are positioning 3M for long-term performance, including progressing the planned spin of our Health Care business and addressing a significant portion of PFAS litigation," he added.
3M shares, a Dow component, were marked 2.65% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $107.02 each.
Last month, reached a tentative agreement with a host of public water companies over the use of so-called 'forever chemicals'.
3M said the agreement will see it pay around $10.3 billion over the next ten years in order to settle suits linked to the use of per- and polyfluoroalkyl substances, also known as PFAs and often referred to as 'forever chemicals'. Payments could rise to as much as $12.5 billion, 3M said, depending on the levels of PFAs found in public water systems.
3M has pledged to stop making PFAs by 2025.
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