Text size
3M adjusted its outlook for the year, saying earnings and sales will come in lower than previously expected.
Chona Kasinger/Bloomberg
3M
had a ton of news to share beyond earnings Tuesday. Investors focused on the positives.
The company reported second-quarter earnings that beat expectations and said it was spinning off its multibillion-dollar healthcare business. Those updates outweighed a cut to
3M
’s
financial outlook.
3M (ticker: 3M) reported adjusted earnings per share of $2.48 per share in the second quarter, beating Wall Street’s forecast for $2.41, according to FactSet. Sales of $8.7 billion were down year-over-year but beat estimates for $8.57 billion.
The stock rose 4% to $139.80 in premarket trading Tuesday.
Separately, the Industrial, chemical, and consumer products company said it was creating a stand-alone healthcare business that will focus on dressings for wounds, healthcare IT, and other areas. 3M said it would retain a nearly 20% stake in the new company.
Selling the healthcare business simplifies the business model of 3M, a seller of everything from office supplies such as Post-its, Scotch tape to electronic connectors.
It wasn’t all good news though. The company dropped its earnings estimate for the year to a range between $10.30 and $10.80 per share from $10.75 and $11.25 earlier. Sales are also expected to come in lower at a range of between -0.5% and -2.5%. That is worse than management’s prior outlook of 1% to 4% growth.
In addition, the company said its Aearo Technologies business voluntarily filed for bankruptcy in a bid to resolve claims against its Combat Arms earplugs it sold to the military. A few settlements related to military veterans’ hearing loss have been reached, but several remain. The company said that if not for its action taken Tuesday, “claims could take years, if not decades, to litigate on a case-by-case basis.”
Write to Karishma Vanjani at karishma.vanjani@dowjones.com
