Maplewood-based 3M Co. raised its full-year adjusted profit and cash flow targets as it reported third-quarter results that significantly beat Wall Street estimates, boosted by sweeping cost cuts and efforts to combat a persistent sales decline were raised.
Adjusted earnings in 2023 will be $8.95 to $9.15 per share, 3M said in a statement Tuesday. This compares to its previous forecast of $8.60 to $9.10 and an average of $8.88, based on analyst estimates compiled by Bloomberg.
The company, which makes ubiquitous consumer products like tape and sticky notes as well as countless industrial products, also expects its adjusted operating cash flow to rise to $6.5 billion to $6.9 billion, from $5.9 billion to $6.3 billion .
“We are driving momentum through strong operational execution,” 3M CEO Mike Roman said in a statement. The results “position us for solid completion by 2023.”
3M shares rose 4.5% to $90.12 on Tuesday.
The higher targets reflect deep cost cuts, thousands of layoffs and other measures Roman has taken to streamline the complex company amid a long sales slump.
3M reported adjusted third-quarter earnings of $2.68 per share, beating Wall Street’s $2.34 estimate. The company attributed its improved bottom line to operational improvements at its factories, increasing restructuring efforts and spending controls.
Sales of $8.02 billion were at the high end of 3M’s third-quarter forecast and slightly above the average analyst estimate. Full-year sales will decline about 3% on an organic basis, a change from 3M’s previous forecast of a 3% decline and no more than flat, the company said.
Shares of the manufacturing giant had fallen 29% this year through Monday’s close, driven by meager sales growth, uneven profits and multibillion-dollar legal settlements resolving environmental and product liability claims.
The company took a major step toward resolving its legal entanglements in August when it agreed to pay $6 billion to settle hundreds of thousands of lawsuits alleging it supplied defective earplugs to U.S. combat troops.
The agreement required the company to record a pretax charge of $4.2 billion in the third quarter, which was adjusted based on reported results.