3M Company (MMM)

[DewDiligence]

3M reaches—(tentative)—$10B+ PFAS settlement with US municipalities, according_to_Bloomberg:

https://www.bloomberg.com/news/articles/2023-06-02/3m-said-to-be-in-at-least-10-billion-pfas-pollution-settlement-lieqkmut

[Lowjack]

Earplugs don't cause hearing loss! Strong pressure waves do!

[DewDiligence]

3M earplug-litigation update:

https://finance.yahoo.com/news/3m-ceo-must-attend-mediation-215026124.html

A federal judge has ordered 3M CEO, Michael Roman to attend mediation aimed at resolving nearly 260,000 lawsuits alleging that 3M military earplugs caused hearing loss, saying the negotiations have reached a "critical juncture."

The judge’s phrase, “critical juncture” suggests that a settlement of the earplug multi-district litigation may be near. On the other hand, I can’t see why 3M would accept unfavorable settlement terms while they still have a chance to prevail in the Aearo bankruptcy approach. Stay tuned.

[Futurecash]

Ex dividend in two days.

[DewDiligence]

3M files Michael Vale for undisclosed personal conduct:

https://finance.yahoo.com/news/3m-announces-departure-michael-vale-120000437.html

Vale was recently promoted as part of 3M’s restructuring (#msg-171767169).

[Futurecash]

Glory days are over.

[Futurecash]

New management level, 6000 have to go.

[Futurecash]

Next stop $97 ……Bottem $85

[DewDiligence]

3M 1Q23 CC transcript:

https://finance.yahoo.com/news/q1-2023-3m-co-earnings-044954858.html

[DewDiligence]

3M changes in senior management pertaining to the corporate restructuring announced today:

https://investors.3m.com/news/news-details/2023/3M-Announces-Senior-Management-Team-Changes/default.aspx

[DewDiligence]

3M 1Q23 results and restructuring announcement…

PR:
https://investors.3m.com/news/news-details/2023/3M-Reports-First-Quarter-2023-Results-Company-Announces-Restructuring-Actions/default.aspx

CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2023/q1/1Q-2023-Earnings-Presentation.pdf


Full-year 2023 guidance (#msg-171018740) remains unchanged. New guidance for 2Q23 is shown on slide #13.

3M’s healthcare spin-off remains on track for closing in 2023.

[DewDiligence]

What does JNJ’s talc settlement mean for 3M?

a) Good news for 3M
b) Bad news for 3M
c) Neutral for 3M

Comments?

[DewDiligence]

JNJ’s (partial) talc settlement:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171617699

[DewDiligence]

JNJ’s talc litigation heads to US Supreme Court:

https://www.wsj.com/articles/j-j-fails-to-win-appellate-rehearing-of-talc-units-bankruptcy-dismissal-a23374be

Johnson & Johnson will seek the Supreme Court’s review after a federal appeals court declined to revive the company’s bid to use chapter 11 bankruptcy to freeze nearly 40,000 lawsuits linking its talc products to cancer.

This case has ramifications for 3M’s earplug litigation, although the two scenarios have material differences (#msg-171072884).

[Kswies]

This analysis does not account for other causes of hearing loss that may have impacted the small percentage of servicemembers with hearing loss, including medical conditions unrelated to noise exposure, non-military noise exposure, hearing loss that predates a service member's use of Combat Arms earplugs, and injuries suffered while not wearing Combat Arms earplugs.

This has been my thoughts on this since the beginning. Hearing loss happens with age, there will be many with their hands out whos hearing loss is not related to this. $MMM long

[DewDiligence]

3M’s Aearo subsidiary is submitting a motion to the bankruptcy court to include the data in #msg-171328905 in the ongoing litigation. (Source: Today’s 3M webcast at the JPM conference.)

[Futurecash]

Historic day. $97 incoming.

[DewDiligence]

What are you saying, exactly?

[Futurecash]

Lol. Lawyers talk for the next 4 - 5 years.

[Kswies]

Hear Hear!!! no pun intended LOL. The more I age the more I see hearing loss is a normal part of the aging process for many people. I believe that there will be a lot of people with normal age, genetic, or some other environmental variable that is root cause for hearing loss with their hands out. $MMM long

[bar1080]

Yep, I learned a lot from that video, too. Then you have to exclude normal hearing loss that most people experience with age. It would be wrong to cut every plaintiff a fat check for minor, normal hearing loss at, say, age 80.

[DewDiligence]

I thought the question in your original post of that video was rhetorical, but I now see that faking hearing loss can't be done. Thanks for posting the video!

[bar1080]

"How to FAKE Hearing Loss During A Hearing Test." This convincing video says you can't do it.

[DewDiligence]

3M says 85-90% of earplug plaintiffs have_no hearing loss:

https://investors.3m.com/news/news-details/2023/Department-of-Defense-Data-Reveals-No-Hearing-Loss-Among-Vast-Majority-of-Plaintiffs-in-Combat-Arms-Earplug-Litigation/default.aspx

[DewDiligence]

…the next business cycle, that is beginning right now, will be great for $MMM.

Yes, provided that 3M can prevail in the court system and thereby limit the Aearo earplug liabilities (#msg-170191027). I’m long.

[Kswies]

"I've held MMM for years" Sorry to hear about your loss. My opinion is that we are good to go from here. Didn't know you were a spelling teacher, thanks for the correction $MMM long and strong!

[bar1080]

I'm not sure what all that was about, but Buffett (note correct spelling) has long recommended S&P 500 index funds. Berkshire Hathaway currently owns two of them, VOO and SPY.

I've held MMM for years and Index funds for much longer.

[Kswies]

I get it, at this point there are a lot of longs that are at a loss. To answer your comment, nothing "predicts" stock movement any better then the weather man "predicts" the weather, its all odds with a few dozen unknown variables. Warren Buffet, the greatest investor in history also states that portfolio diversification is foolish and indicates that one should buy a great company at a great price and hold it forever. I just so happen to think this is a great price to buy into this great company. IMO the next business cycle, that is beginning right now, will be great for $MMM. $MMM long and strong! Good luck to you!

[bar1080]

Are poor earnings and weak dividend growth gifts too? as far as the chart, there's never been any evidence that TA predicts stock movement. Buffett,, the greatest investor in history doesn't even have a computer on his desk in Omaha.

I've long owned MMM, but it's the dog of my large and diversified portfolio

[Kswies]

Prices like this are gifts, this ticker hasn't been in this range for 10 years! $MMM is now back in line with its trend and ready to continue into the next business cycle with $1.50 dividends along the way. Double bottom is in, ready to run. Love this CHEAP $MMM!!!

$MMM long

[Futurecash]

Best years are over. Next stop $97.

[Fangster]

Been waiting to buy MMM!

[DewDiligence]

Those ugly numbers are largely a result of the earplug litigation. If 3M can get limit the earplug liability, the other problems should take care of themselves in due course.

[bar1080]

3M Q dividends. My worst grower lately by miles

    Date	    Dividend 
 Mar 12, 2023   1.50 Dividend 
 Nov 17, 2022	1.49 Dividend 
 Aug 19, 2022	1.49 Dividend 
 May 19, 2022	1.49 Dividend 
 Feb 17, 2022	1.49 Dividend 
 Nov 18, 2021	1.48 Dividend 
 Aug 20, 2021	1.48 Dividend 
 May 20, 2021	1.48 Dividend 
 Feb 11, 2021	1.48 Dividend 
 Nov 19, 2020	1.47 Dividend 
 Aug 21, 2020	1.47 Dividend 
 May 21, 2020	1.47 Dividend 
 Feb 13, 2020	1.47 Dividend 
 Nov 21, 2019	1.44 Dividend 
 Aug 15, 2019	1.44 Dividend 
 May 23, 2019	1.44 Dividend 
 Feb 14, 2019	1.44 Dividend 
 Nov 21, 2018	1.36 Dividend 
 Aug 23, 2018	1.36 Dividend 
 May 17, 2018	1.36 Dividend 
 Feb 15, 2018	1.36 Dividend

[bar1080]

3M YTD -2.52%; Perf for 12 months -27.2%, my worst performer YTD and probably the last several years.

[DewDiligence]

3M increases dividend for 65th consecutive year:

https://finance.yahoo.com/news/3m-board-declares-quarterly-dividend-215700658.html

The quarterly increase was only a penny—from $1.49 to $1.50—so it’s pretty clear that the raise is mainly to keep the streak alive.

At the current share price ($116.90), the new annualized payout of $6.00 is a yield of 5.1%.

[DewDiligence]

3M 4Q22 CC transcript:

https://finance.yahoo.com/news/3m-company-nyse-mmm-q4-174248477.html

[DewDiligence]

3M 4Q22 CC slides:

https://s24.q4cdn.com/834031268/files/doc_financials/2022/q4/4Q-2022-Earnings-Presentation-vFINAL.pdf

[DewDiligence]

3M reports 4Q22 results—issues 2023 guidance:

https://s24.q4cdn.com/834031268/files/doc_financials/2022/q4/2022-Q4-Earnings-Release-vFinal.pdf

3M's full-year expectations for 2023 include the following:

• -6 to -2 percent adjusted total sales growth, reflecting the following:
o -3 percent to flat adjusted organic sales growth, includes -2 percentage point impact from disposable respirator decline and exit of Russia;
o -2 to -1 percent adjusted foreign currency translation impact;
o -1 percent adjusted divestiture impact.

• Adjusted earnings per share of $8.50 to $9.00, versus 2022 of $9.88 on a comparable basis. 2023 adjusted earnings per share include -$0.55 to -$0.80 of combined year-on-year headwinds from the decline in disposable respirator demand, exit of Russia, foreign currency translation, and divestitures

• Adjusted operating cash flow of $5.8 to $6.3 billion contributing to 90% to 100% adjusted free cash flow conversion

These expectations reflect changes in certain of 3M’s non-GAAP measures beginning in 2023 as discussed in the preceding section [see my comments below]. 3M expects to record a pre-tax restructuring charge of $75 to $100 million in the first quarter of 2023. This pre-tax charge and associated savings is included in the company’s full-year 2023 outlook.

The change in the way 3M calculates non-GAAP EPS is that PFAS manufacturing is now treated as a discontinued business (#msg-170742171) and is therefore excluded. (3M was already excluding earplug- and PFAS-related legal expenses from the non-GAAP EPS calculation.)

[DewDiligence]

3M’s lineup at CES:

https://finance.yahoo.com/news/3m-innovation-full-display-ces-141500180.html

[DewDiligence]

3M is appealing this matter to the 7th US Circuit Court (#msg-170191027), so Judge Rodgers’ statement today has no practical consequence, as far as I can tell.

[bar1080]

"Judge penalizes 3M, bars it from shifting liability in earplug litigation"

"(Reuters) - A U.S. judge on Thursday barred 3M Co from trying to avoid liability for injuries current and former U.S. military members sustained from its allegedly defective earplugs by shifting blame to a subsidiary.

U.S. District Judge M. Casey Rodgers, the Pensacola, Florida-based judge tasked with overseeing nearly 250,000 cases over the combat earplugs, said 3M deserved the "harshest penalty" for its "bad faith" attempts to transfer the liability to a bankrupt unit."

https://finance.yahoo.com/news/u-judge-penalizes-3m-bars-233244902.html

[DewDiligence]

3M—US Chamber of Commerce files amicus brief in support of 3M’s petition before the 7th US Circuit Court with respect to earplug litigation:

https://finance.yahoo.com/news/surprise-u-chamber-backs-3m-003147746.html

[DewDiligence]

3M will_cease_making PFAS products_by_end_of 2025:

https://finance.yahoo.com/news/3m-exit-pfas-manufacturing-end-113000562.html

3M’s current annual PFAS sales are $1.3B, about 4% of total corporate sales.

[DewDiligence]

When a company slashes guidance (again) and the stock is flattish (as it is this morning), it may be a hint that the share price is close to a bottom.

[DewDiligence]

3M is seeing some moderation of price inflation in the logistics area.

[DewDiligence]

3M reports 3Q22 results—lowers 2022 EPS guidance_again…

PR:
https://investors.3m.com/news/news-details/2022/3M-Reports-Third-Quarter-2022-Results/default.aspx

CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q3/3Q-2022-Earnings-Slides.pdf


2022 non-GAAP* EPS guidance has been lowered to $10.10-10.35 (vs $10.30-10.80 three months ago and $10.75-11.25 six months ago). The biggest components of the lowered guidance vs three months ago are FX and supply-chain bottlenecks.

*Excludes legal expenses for earplug and PFAS cases. The next trial in the earplug MDL will be in Feb 2023. The next trial in the PFAS MDL will be in Jun 2023.

[DewDiligence]

3M—Federal Appellate Court agrees to hear Aearo-bankruptcy case:

https://www.wsj.com/articles/3m-earns-appellate-review-of-earplug-units-bankruptcy-shield-11665682266

The Seventh U.S. Circuit Court of Appeals in Chicago on Wednesday granted Aearo’s petition requesting a direct review of the bankruptcy-court ruling, bypassing a federal-district court and putting the appeal on a faster track to resolution.

Aearo is the 3M wholly-owned subsidiary that made the earplugs in question and that recently filed for bankruptcy protection.

Please see #msg-169803125 for related info. The 30-40% probability I gave in that post (from 8/26/22) that 3M will ultimately prevail on this matter may be a little too low insofar as the Appellate Court’s willingness to allow 3M to bypass the Federal District Court is an encouraging sign.

3M is +5% as I’m typing.

[Futurecash]

Employees paying for mismanagement. 3M cuts jobs.

[Banjo50]

Maybe they have the ability to look into the future.