3 million (MMM), the maker of sticky tape and Post-it notes, fell 6.2% in New York trading to a three-month low of $115.07 after the company reported “slower-than-expected” fourth-quarter growth and said it would cancel 2,500 jobs, predicts a further decline in sales this year.
- 3M ( MMM ) sales fell 6% in the fourth quarter.
- The company announced it would cut 2,500 global manufacturing jobs to adjust to weakened demand.
- 3M predicts that earnings per share will fall again in 2023 and predicts a 10-15% decline in sales in the first quarter of the year.
The company reported earnings of $541 million, or 98 cents per share, down nearly 60% from a year earlier. Its revenue was down 6% year-over-year for the quarter, totaling $8.1 billion.
“In a year affected by inflation, global conflict and economic softening, our team took actions that ensured 3M’s future success,” said 3M Chairman and CEO Mike Roman, calling the planned manufacturing job cuts “a necessary decision that would in accordance with modified production. bundles.”
A further decline is expected in 2023
The company will incur pre-tax restructuring costs of $75 million to $100 million in the first quarter. First-quarter revenue will fall 10% to 15% compared to the same quarter a year earlier, the company forecast, while full-year revenue will fall 2% to 6%.
The company’s management said demand for its disposable face masks is falling, while the resurgence of the Covid infection in China is hurting demand and regular plant closures are disrupting production. They cited changes in the global market, such as the suspension of operations in Russia and the impact of a strong dollar.
They expect earnings per share to fall to $8.50 to $9.00 per share in 2023, down from expectations set in 2022 of $9.88 per share.
3M’s planned layoffs are a harbinger of broader economic concerns as companies from technology to manufacturing brace for slower sales and the threat of a recession. First in line are part-timers. In the last five months of 2022, employers cut nearly 111,000 temporary positions.
At the same time, some of the nation’s largest corporations are trying to raise wages in an effort to attract more workers.
Walmart (WMT), the nation’s largest employer, announced it will raise its minimum wage to $14 an hour from $12 as companies scramble to keep retail and warehouse workers into the new year.
The move could have a significant impact in states that have not raised their minimum wages above the $7.25 an hour federal rate. Walmart’s other rivals, such as Amazon (AMZN) or Target (TGT), have a minimum wage of $15. The company is struggling to stay competitive in the marketplace, Walmart CEO and President John Furner said in a statement Tuesday. Despite laying off hundreds of company employees in 2022, the company has 30,000 retail jobs listed as open on its website.