3M Co. raised its profit forecast for the second straight quarter on Tuesday as Chief Executive Officer Bill Brown’s effort to revitalize the conglomerate gains traction despite ongoing challenges from economic volatility.
Adjusted earnings will be $7.95 to $8.05 a share, up from a prior range that topped out at $8, the Maplewood-based company said in a statement Tuesday that revealed better-than-expected quarterly results. Analysts had predicted $7.94 on average in estimates compiled by Bloomberg. Total sales will grow more than 2.5%.
The improved outlook suggests Brown’s turnaround plan for the company remains on track in the face of global tariffs and unsteady demand. Since taking the helm last year, the CEO has been pushing to change working practices and reignite organic sales growth, in part with new products, while shifting production and making pricing changes.
3M joined other major manufacturers boosting guidance Tuesday, including General Motors and General Electric, suggesting resilience in certain segments of corporate America even as concerns grow around the broader economy.
Shares of 3M rose 7.7% Tuesday. The stock gained 20% this year through Monday, compared with a 15% increase in the SP 500 Index.
Adjusted third-quarter earnings were $2.19 a share, the company said. That compares with the $2.07 average of analyst estimates compiled by Bloomberg. Adjusted operating margin, a key metric for the company, was 24.7%.
Turnaround Effort
3M has struggled for years with potentially costly legal claims related its past manufacturing of so-called forever chemicals. Under Brown, the company has tried to settle some actions and remove the overhang that has weighed on the stock.
It has also sought to improve its safety record, how its satisfies orders and how it makes each product in its sprawling portfolio. Brown and other executives review business lines and factories regularly to increase efficiency.
Brown is now beginning efforts reshape 3M in earnest. The company is planning to sell billions of dollars of assets from its safety and industrial arm as it looks to exit lower growth businesses, Bloomberg reported this month. That unit, which includes divisions such as industrial adhesives and personal safety equipment, generated about $11 billion in revenue last year.
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