3M Co. (MMM) -) shares powered higher in pre-market trading Tuesday after the industrial group posted stronger-than-expected third quarter earnings, and boosted its full-year profit forecast, as its cost-cutting drive continues to offset slumping global sales.
3M said adjusted profits for the three months ending in September were pegged at $2.68 per share, down a penny from the same period last year but well ahead of the Street consensus forecast of $2.34 per share. Group revenues, 3M said, fell 3.6% to $8.3 billion, narrowing topping analysts' forecasts of a $7.98 billion tally. Organic sales were down 3.7%.
Looking into the coming financial year, 3M said it now sees adjusted earnings in the region of $8.95 to $9.15 per share, up from its prior forecast of $8.60 to $9.10 share, with adjusted sales falling 5% and operating cash flows in the region of $6.5 to $6.9 billion.
"We are building momentum through strong operational execution. In the third quarter 3M again delivered for our customers in an uncertain environment, positioning us for a solid close to 2023. Our actions led to underlying earnings ahead of our expectations, as well as better than expected margins and cash flow," said CEO Mike Roman.
"Our results reflect continued execution of our priorities – driving operational performance, spinning off Health Care, and reducing risk and uncertainty," he added. "Our strengths in material science innovation align with global trends in high-growth markets and sustainability, enabling us to develop indispensable products in attractive areas such as automotive electrification, climate technology, and industrial automation."
3M shares were marked 4.7% higher in early trading immediately following the earnings release to change hands at $89.61 each, a move that would still leave the stock down more than 15% over the past six months.
Earlier this summer, 3M said it would pay $6 billion over the next six years, including $1 billion in common stock, to resolve legal claims linked to its Combat Arms Earplugs sold to the U.S. military.
That followed an agreement to pay out $10.3 billion to a host of public water companies over the next 10 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.
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