(Reuters) -U.S. industrial conglomerate 3M Co on Wednesday warned of "a slow growth environment" in 2024 and forecast weakness in its electronics and consumer segments for the current and following quarter.
Shares of the diversified manufacturer fell 5.7% in afternoon trade after the company also said current-quarter sales are expected to come in between $7 billion and $8 billion, compared with its previous guidance of $8 billion, due to a slow recovery in China.
"The consumer has shifted spending from discretionary to staples and other experimental activities," 3M CFO Monish Patolawala said. "Based on China and FX, we are a little down from where we said."
3M raised its full-year profit forecast in July and exceeded second-quarter earnings estimates by offsetting high raw material and labor costs by hiking prices.
The company has also said it is seeing a significant drop in U.S. retailer inventories as spending on consumer electronics has dropped off due to inflation and higher borrowing rates.
The dour outlook comes as the company grapples with the fallout from lawsuits related to its Combat Arms earplugs and water pollution claims tied to "forever chemicals".
The St. Paul, Minnesota-based company in June reached a $10.3 billion settlement related to the water pollution claims.
3M last month also agreed to pay $6 billion to settle lawsuits by U.S. military veterans and service members who said they suffered hearing loss from using the company's earplugs. The firm was expected to take a charge of $4.2 billion in the current quarter related to the settlement.
(Reporting by Kannaki Deka in Bengaluru; Editing by Shinjini Ganguli and Devika Syamnath)