In the face of declining expectations for its Q3 earnings, 3M Co. (NYSE:MMM), the multinational corporation known for its wide range of products including Scotch tape, Post-it Notes, Command strips, and N95 masks, is set to announce its financial results. The company has been grappling with underperformance in its electronics and consumer sectors and a sluggish Chinese market, leading to lowered expectations for profit, sales, and free cash flow.
The company's CFO acknowledged this "significant slowness", which has been reflected in the company's stock performance. Over the past three months, mirroring a 6% decline in the Dow Jones Industrial Average, 3M's stock has dropped 17.3% and is on track for its lowest close since June 2012.
Despite these challenges, Andrew Obin, an analyst at BofA Securities, suggests that 3M could surpass these low expectations, potentially triggering a positive share price reaction. This optimism is not without basis as the company has consistently outperformed average analyst estimates for adjusted profit and sales in 11 of the past 12 quarters.
However, the company also faces substantial litigation issues which could impact its financial standing. It has taken a $10.3 billion charge for a proposed PFAS settlement and has agreed to pay up to $6 billion to settle claims over faulty Combat Arms earplugs sold to the U.S. military.
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