3M Raises Profit Forecast as Cost Controls, Price Hikes Help

3M raised its full-year adjusted profit forecast on Tuesday, October 20, to $9.10–$9.15 per share from $8.80–$8.95, with cost controls and higher prices supporting margins, Economic Times Markets reported. Shares of the US industrial conglomerate rose 2.7% in premarket trading.

Quarterly adjusted revenue increased 4.2% to $6.6 billion, while adjusted profit reached $2.50 per share, compared with $2.23 a year earlier. The safety and industrial business remained resilient, helping underpin the stronger outlook.

Industrial strength offsets uneven demand

Strong US industrial activity and rising sales of chipmaking equipment and materials helped 3M counter uneven demand in markets affected by inflation. Within its Transportation and Electronics business, data centres and semiconductor-related markets provided support as demand from automotive and consumer electronics customers remained subdued.

Consumer-facing operations continued to face cautious discretionary spending. Higher energy costs also posed a potential risk to manufacturing activity and wider industrial demand.

Product launches and operating improvements

Under chief executive William Brown, the Saint Paul, Minnesota-based company has been working to improve customer service and operational execution alongside its efforts to strengthen profitability.

The maker of Scotch tape and Post-it products introduced 87 new products in the third quarter and expects its annual total to exceed 350 by year-end. That launch target and the higher earnings guidance remain expectations, rather than completed full-year results.