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3M Beat Profit Estimates By Increasing Prices And Reducing Costs

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FILE PHOTO: The 3M Global Headquarters in Maplewood, Minnesota

(CTN News) – A better-than-expected quarterly profit was reported by 3M Co on Tuesday as a result of price hikes and cost reductions that offset the impact of slow sales, sending its shares up nearly 8% in pre-market trading, despite a disappointing sales forecast.

As a result of the spinoff of its healthcare business, 3M stated that its dividend payout ratio is expected to be 40% of adjusted free cash flow over the next few years, with the possibility of increasing over time.

The company has been able to offset inflation and slow demand in its electronics business due to steady price increases across categories that have helped it offset inflation and slow demand in other categories as well.

During his tenure as chief executive officer of 3M, Mike Roman said, “We improved performance in our businesses through strong operational execution, completed the spinoff of Solventum, and finalized two substantial legal settlements.”

A number of changes were made last year, including a reduction of 10% in the 3M global workforce, a shift to an export-led business model, the closure of several facilities, and the spinoff of Solventum, all of which helped the company to survive the slow demand environment, especially in markets like China.

A short while ago, Solventum began trading on the New York Stock Exchange as a separate company listed on the NYSE.

Based on LSEG data, the St. Paul, 3M Minnesota-based company reported an adjusted profit of $2.39 per share on adjusted net sales of $7.72 billion for the first quarter of the year, which was above the average analyst expectation of $2.10 and $7.63 billion in revenue in the quarter, according to LSEG.

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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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