3M’s stock tanks after 2024 earnings outlook comes in well below forecasts

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Shares of 3M Co. tanked Tuesday, after the consumer, industrial and healthcare-products company provided a 2024 profit outlook that was well below forecasts, which overshadowed fourth-quarter results that topped expectations.

The results come as the maker of Post-it Notes, Scotch tape, N95 masks and Command strips is progressing with the spinoff of its health care business, which is expected to occur in the first half of 2024.

The company expects 2024 adjusted earnings per share of $9.35 to $9.75, compared with the current FactSet EPS consensus of $9.90. That includes a first-quarter adjusted EPS outlook of $2.00 to $2.15, which is below expectations of $2.22.

The outlook reflects the health care business as part of the company for the year, but does not reflect the potential impact of funding for the public water systems and Combat Arms Earplug settlements.

The stock

dropped 4.5% in premarket trading, putting it on track to open at a six-week low.

For the fourth quarter, net income rose to $945 million, or $1.70 a share, from $541 million, or 98 cents a share in the same period a year ago.

Excluding nonrecurring items, such as litigation costs and other special items, adjusted EPS rose to $2.42 from $2.18 to beat the FactSet consensus of $2.31.

Total sales fell 0.8% to $8.01 billion, above the FactSet consensus of $7.69 billion.

Among 3M’s business segments:

  • Safety and Industrial sales declined 2.7% to $2.661 billion, which was just shy of the FactSet consensus of $2.682 billion.

  • Transportation and Electronics sales increased 1.7% to $2.089 billion from $2.06 billion, while the FactSet consensus called for a decline to $1.713 billion.

  • Health Care sales eased 0.3% to $2.037 billion, just below the FactSet consensus of $2.095 billion.

  • Consumer sales were down 1.4% to $1.226 billion, compared with the FactSet consensus of $1.227 billion.

“Our team remains focused on further improving our operational performance, optimizing our portfolio, and reducing risk,” said Chief Executive Mike Roman. “We will continue to invest in high-growth markets where 3M’s unique capabilities can make a difference, including automotive electrification, climate technology, and industrial automation.”

The stock has soared 26.2% over the past three months through Monday, while the Dow Jones Industrial Average
of which the stock is a component, has advanced 15.4%.

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