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April 27, 2021, 2:32 p.m. EDT

3M stock drops despite earnings beat, as cost inflation seen taking a bigger bite out of profits

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By Tomi Kilgore

Shares of 3M Co. /zigman2/quotes/205029460/composite MMM +1.37% sank 2.4% in afternoon trading, enough to pace the Dow Jones Industrial Average's /zigman2/quotes/210598065/realtime DJIA -0.17% decliners, even as the consumer, health care and industrial products company reported first-quarter profit and revenue that beat expectations. The stock's $4.81 price decline was shaving about 32 points off the Dow's price, while the Dow was up 7 points, or less than 0.1%. Investors may be concerned about 3M's comments regarding the expected negative impact that input cost inflation will have on earnings this year. In the first quarter, Chief Financial Officer Monish Patolawala said 3M experienced increasing costs, particularly for raw materials and logistics, due primarily to the stronger demand, the ongoing COVID-19 pandemic and Winter Storm Uri. "In our view, we expect global supply chain dynamics to remain fluid and for raw material and logistics headwinds to persist," Patolawala said, according to a FactSet transcript of the post-earnings conference call with analysts. "Therefore, we now anticipate a full-year raw materials and logistics headwind of 30 cents-to-50 cents per share versus a prior expectation of flat to a 10-cent headwind at the start of the year."

/zigman2/quotes/205029460/composite
US : U.S.: NYSE
$ 172.59
+2.33 +1.37%
Volume: 3.02M
Dec. 3, 2021 4:02p
P/E Ratio
16.95
Dividend Yield
3.43%
Market Cap
$99.46 billion
Rev. per Employee
$338,825
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,580.08
-59.71 -0.17%
Volume: 444.85M
Dec. 3, 2021 5:35p
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