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(Reuters) -U.S. industrial conglomerate 3M Co on Tuesday raised its full-year profit forecast and reported better-than-expected quarterly results after a $10.3 billion environment charge, sending its shares up nearly 3% before the bell.
3M, which makes electronic displays for smartphones and tablets, was able to offset high raw material and labor costs by hiking prices. It also reduced its total global workforce by 10% this year to combat the effects of waning demand for consumer electronics.
We could see the shares react positively at the open, amidst low investor expectations, but do not expect them to sustain any bounce given the litigation backdrop, said Barclays in a note.
The company is facing thousands of lawsuits related to its use of “forever chemicals” that are linked to cancer, hormonal dysfunction and environmental damage, and defective earplugs that caused hearing loss for U.S. military members.
3M reported a quarterly loss compared to a year-ago profit, as it took a hit from a $10.3 billion settlement related to water pollution claims tied to “forever chemicals” that do not easily break down in the human body or environment.
The maker of ‘Scotch’ tape and ‘Post-it’ note said it expects its full-year profit between $8.60 and $9.10 per share, up from its prior guidance of $8.50 to $9.
“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 3M Chairman and Chief Executive Officer Mike Roman.
3M reported adjusted earnings per share of $2.17, above Street estimates of a profit of $1.72, per Refinitiv IBES.
Meanwhile, it posted adjusted revenue of $7.99 billion, beating analysts’ average expectation of $7.87 billion.
Reporting by Kannaki Deka in Bengaluru; Editing by Shinjini Ganguli
