3M forecasts weak 2024 profit as demand slows

(Reuters) -Industrial conglomerate 3M Co forecast full-year earnings below Wall Street estimates on Tuesday as the company grapples with weak demand, sending the diversified manufacturer’s shares down 7.2% in premarket trading.

Higher interest rates and inflation have dampened demand for non-essential big-ticket purchases, hurting 3M’s electronics business that makes displays for smartphones and tablets.

Last year, 3M undertook restructuring measures, including cutting jobs, to streamline its business and reduce costs.

“2024 outlook disappoints on margins – including both the expected restructuring savings and the underlying operating margins of the business,” UBS analyst Chris Snyder said.

The company, which in September warned of a slow growth environment this year, had also flagged in December that retailers were cutting down on inventory levels.

The gloomy forecast on Tuesday comes at a time when 3M is dealing with the fallout from lawsuits related to its Combat Arms earplugs and water pollution claims tied to “forever chemicals”.

The company expects 2024 profit between $9.35 and $9.75 per share, compared with analysts’ estimates of $9.81, according to LSEG data.

On an adjusted basis, 3M earned $2.42 per share in the fourth quarter, beating analysts’ estimates of $2.31.

The company reported adjusted revenue of $7.69 billion, compared with estimates of $7.70 billion.

(Reporting by Kannaki Deka in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta)