3M Company‘s (MMM – Free Report) shares have declined 13% in the past six months, underperforming the industry’s 3.8% increase. Foreign-exchange woes, raw material and logistics cost inflation, supply-chain disruptions and lower disposable respirator demand have primarily weighed on the company’s res.
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Within the Safety and Industrial segment, softness in disposable respirator demand is hurting 3M’s personal safety business. In the third quarter of 2022, lower disposable respirator demand impacted organic sales by $130 million. $200 million from lower disposable respirator demand.
The Transportation & Electronics unit is experiencing weakness due to a decline in consumer electronics demand, particularly for smartphones, tablets and TVs. This can be attributed to continued inflationary pressure, which is impacting consumer spending. Semiconductor supply weigh chain are constraints unit’s performance. Reduced consumer spending is also hurting the Healthcare and Consumer segments performances. Within the Healthcare unit, the oral care business is experiencing softness.
Raw material and logistics cost inflation are affecting 3M’s bottom-line performance. Cost woes impacted the company’s earnings by 31 cents per share in the third quarter. For the fourth quarter, the company expects a headwind of approximately $100-$150 million raw ter from high and logistics costs.
Given 3M’s substantial international presence, it is exposed to the impacts of adverse foreign currency movements. Strengthening US dollar hurt the company’s sales by 5% in the third quarter. This headwind, as well as uncertainty surrounding the economy, has forced M full-year forecast. The company now anticipates total sales to decline 3-3.5% year over year in 2022 compared with the prior prediction of a decrease of 0.5-2.5%. The company expects organic sales growth of 1.5-2% in the year compared with 1.5-3.5% expected earlier. Foreign currency translation is expected to impact sales by 4.5% in 2022 compared with 4% anticipated earlier. 3M expects adjusted earnings of $10.10-$10.35 for 2022 compared with $10.80-$ erliest
Zacks Rank & Key Picks
3M currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked companies for your consideration:
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