3M Co. stood by its full-year financial guidance while acknowledging new risks from the unfolding trade war, compounding the challenges for Chief Executive Officer William Brown as he tries to turn around the sprawling Maplewood-based manufacturer.
Tariffs will have a negative impact of as much as 40 cents a share on full-year earnings, the company said Tuesday in a statement as it reported first-quarter results. Still, 3M reaffirmed guidance for 2025 adjusted profit of $7.60 to $7.90 a share.
Shares rose 8.1% Tuesday and contributed to Tuesday’s broad market rally.
The caveat on its outlook highlights how President Donald Trump’s trade war is rippling across the economy and cutting into growth expectations. 3M as recently as March reiterated its full-year guidance that called for a bigger profit and organic sales growth of 2% to 3%.
3M is considered an economic bellwether because its portfolio of thousands of consumer and industrial products give it broad exposure to a wide swath of the economy. The company derives about 11% of its sales in China, according to RBC Capital Markets, putting it at risk from the growing trade conflict between Washington and Beijing, which have imposed blanket tariffs of 100% or more on each country’s goods.
3M is looking at measures to mitigate tariffs, including shifting production to optimize its network and possible surcharges on certain customers.
The company’s expected tariff impact, “suggests a bigger hit especially at the high end than our analysis,” wrote Bloomberg Intelligence analyst Karen Ubelhart.
3M’s above-consensus adjusted operating margin signals “improving operations, but that might not last if demand declines,” she added.
Sales for the first-quarter fell 1% to $6 billion and adjusted earnings per share from continuing operations were $1.88, both ahead of analyst expectations. Adjusted operating margin of 23.5% also beat estimates.
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