3M's gloomy forecast sends shares plunging 12%

Shares of diversified manufacturer 3M (NYSE: MMM) plunged around 12% on Tuesday after the Post-it maker forecast full-year earnings below Wall Street estimates, saying the macro environment “remains muted.”

The company expects 2024 profit between $9.35 and $9.75 per share, missing analyst expectations of $9.81 per share. 3M also reported fourth-quarter adjusted earnings per share of $2.42, topping estimates of $2.31, while adjusted revenue of $7.69 billion narrowly missed forecasts of $7.70 billion.

3M said its electronics business continues to be impacted by soft consumer retail end markets in China as higher interest rates and persistent inflation lead customers to cut back on discretionary purchases. Businesses were also pressured by customers to reduce inventories, particularly in Greater China and EMEA.

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The underwhelming outlook comes as 3M undertakes a major restructuring aimed at generating $700-900 million in savings once completed. However, the forecast does not reflect the potential financial impact of recent legal settlements related to water pollution claims and Combat Arms earplugs.

3M shares are down 21% over the past 12 months.