3M Co. (MMM) shares slumped lower Tuesday after the industrial group posted weaker-than-expected fourth quarter earnings, while unveiling 2,500 job cuts, while warning of 'persistent' global economic challenges.
3M said adjusted profits for the three months ending in December were pegged at $2.28 per share, 7% from the same period last year and 8 cents shy of the Street consensus forecast. Group revenues, 3M said, fell 5.8% to $8.1 billion, just ahaed of analysts' forecasts of an $8.04 billion tally.
Looking into the coming financial year, 3M said it now sees adjusted earnings in the region of $8.50 to $9.00 share, compared to the Refinitiv forecast of $10.20 per share, with adjusted sales falling between 2% and 6%.
"3M continues to focus on delivering for customers and shareholders in a challenging economic environment," said CEO Mike Roman. "The slower-than-expected growth was due to rapid declines in consumer-facing markets -- a dynamic that accelerated in December -- along with significant slowing in China due to COVID-related disruptions. As demand weakened, we adjusted manufacturing output and controlled costs, which enabled us to improve inventory levels."
"We expect macroeconomic challenges to persist in 2023," he added. "Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders."
3M shares were marked 5.1% lower in Tuesday afternoon trading following the earnings release to change hands at $116.43 each, extending the stock's six-month decline to around 13.2%.
Late last year, 3M said it would cease production of Perfluoralkyl and polyfluoroalkyl substances -- also known as PFAs or 'forever chemicals' -- from 2025, citing links to cancer, low birth weights and cardiovascular difficulties.
Annual PFA sales, however, comprise around $1.3 billion of 3M's top line, and the group cautioned that it will take a hit of between $700 million and $1 billion in asset impairment charges to compensate for the shutdown.
