-Industrial giant 3M on Tuesday raised annual profit forecast for the second time this year, betting on cost-cutting measures and a strategic shift toward high-margin products, sending its shares up as much
as 2.6% in premarket trading.
The company has steered toward product innovation under CEO Bill Brown, while pivoting away from its earlier emphasis on managing legal risks and cutting supply-chain costs.
Brown took the helm in 2024, when the company was grappling with slowing sales and the fallout from several lawsuits related to its earplugs and "forever chemicals".
His strategy centers on cross-selling new high-margin products to existing customers, improving delivery times to avoid penalties and trimming general and administrative costs.
The Saint Paul, Minnesota-based company launched 70 new products in the third quarter. It expects to reach 250 new product launches by the end of 2025, exceeding its initial target of 215.
3M's selling, general and administrative expenses dropped 22.8% during the third quarter, while research and development expenses rose 10.4%.
The conglomerate expects 2025 operating margin to grow 180 to 200 basis points, compared with its previous projection of a rise of 150 to 200 basis points.
It expects 2025 adjusted profit to be between $7.95 and $8.05 per share, compared with its previous forecast of $7.75 to $8 per share.
3M posted third-quarter adjusted profit of $2.19 per share, beating analysts' estimate of $2.08, according to data compiled by LSEG.
Total quarterly adjusted revenue came in at $6.32 billion, while analysts estimated $6.25 billion.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Shilpi Majumdar)