3M was busy before the market opened Tuesday, as it announced a planned split of its healthcare business, second-quarter results and the voluntary bankruptcy of the company’s Aearo Technologies subsidiary.
Backed by the wave of advertisements, 3M Co MMM shares,
It rose 8.6% to an intraday high of $145.70 moments after the opening, before paring gains to 4.9% in morning trade.
The company said the “new 3M” would continue to be a “leading global innovator in materials science”, while “Healthcare” would be a “pioneer in diversified healthcare technology.” The subprogram will provide leadership in sectors such as wound care, oral care, healthcare information technology, and biopharmaceutical filtration, according to 3M.
look now: 3M to separate the healthcare business and create two listed companies
New 3M sales were $26.8 billion in 2021, while healthcare sales were about $8.61 billion in the same period. 3M expects to complete the offer by the end of 2023.
3M also announced its second-quarter results Tuesday, reporting net income of $78 million, or 14 cents a share, compared to $1.5 billion, or $2.59 a share, in the same period last year. However, the company received $1.2 billion in pre-tax fees in connection with its Combat Arms Earplugs litigation redress.
On an adjusted basis, 3M reported earnings of $2.48 per share, down from $2.75 per share in the prior-year quarter. The consensus for FactSet earnings was $2.65 per share.
look now: 3M to separate the healthcare business and create two listed companies
The company reported sales of $8.70 billion, down 2.8% from $8.95 billion in the same quarter last year, reflecting a negative impact of 4 percentage points from foreign exchange rates. 3M’s sales were above the FactSet consensus of $8.57 billion.
3M also lowered its full-year sales and earnings forecast, citing the impact of a stronger US dollar and an uncertain macroeconomic environment. The company now expects sales to fall 2.5% to 0.5% from a year ago, compared to its previous forecast of 1% to 4% growth. 3M now expects $10.30 to $10.80 in adjusted EPS for the full year, compared to its previous forecast of $10.75 to $11.25.
In a separate announcement, 3M said its affiliate Aearo Technologies and related entities have voluntarily filed for bankruptcy, a move aimed at resolving litigation related to Combat Arms Earplugs. 3M said in a statement that it had committed $1 billion to fund a trust fund to resolve all claims.
look now3M affiliate Aearo Technologies files for bankruptcy as it looks to resolve Combat Arms Earplugs litigation
3M shares are down 20.8% this year, while the Dow Jones Industrial Average DJIA is down,
Of which 3M component, it lost 12.2%.