3M tops fourth-quarter profit forecasts, sees solid 2025 growth
By Josh White
Date: Tuesday 21 Jan 2025
(Sharecast News) - 3M shares were rising on Tuesday, after it forecast growth in profit and sales for 2025 on the back of its new restructuring and growth strategies being implemented by chief executive officer William Brown.
The industrial giant said it expected adjusted earnings per share to range between $7.60 and $7.90, aligning closely with analysts' expectations, which averaged $7.78.
That followed a year in which cost-cutting measures and productivity improvements boosted per-share profit by 21% to $7.30.
It said its fourth-quarter results met or slightly exceeded market expectations, with adjusted earnings of $1.68 per share surpassing analysts' estimates of $1.66.
Revenue for the period rose marginally to $6.01bn, ahead of the $5.78bn consensus forecast.
All three of 3M's business segments recorded organic growth, with new product launches increasing by 32% over the year, exceeding the company's targets.
Brown's turnaround strategy, which includes accelerating product development and reducing operational inefficiencies, had driven a more-than-56% rise in 3M's stock over the last 12 months, significantly outperforming the broader market.
The restructuring effort had also led to a 44% reduction in total operating expenses in 2024 compared to the prior year.
Since 2023, 3M had cut more than 8,500 jobs, reduced its office space by 12%, and spun off its healthcare division into the newly-listed Solventum Corporation.
Looking ahead, 3M projected organic sales growth of up to 3% in 2025, compared to the 2.9% anticipated by analysts.
The company said it expected modest growth in the US and EMEA regions, and mid-single-digit expansion in China.
However, 3M remained cautious about certain end markets, citing a slight decline in automotive production and modest improvements in consumer electronics demand.
Brown had prioritised investment in high-growth areas such as electric vehicles, data centres, and semiconductors while addressing legacy challenges, including legal settlements related to 'forever chemicals' and military earplugs.
The company recently entered a licensing agreement with US Conec to expand its presence in the data centre market.
In addition to operational changes, 3M had introduced a new hybrid work policy, requiring senior-level employees to be in the office three days a week in a bid to foster collaboration.
The company was also planning to repurchase about $1.5bn in shares in 2025 as part of its ongoing efforts to enhance shareholder value.
At 0935 EST (1435 GMT), shares in 3M Company were up 4.81% in New York at $147.81.
Reporting by Josh White for Sharecast.com.
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