U.S. conglomerate 3M Co (MMM.N) said supply chain disruptions from the COVID-19 pandemic and the February winter storm were pushing its costs higher, after it posted a profit beat on pandemic-fueled demand for safety products.
Shares fell 1.6% to $196.40 before the bell on Tuesday as 3M reiterated its full-year forecast of earnings and total sales growth, a move analysts dubbed conservative.
“Global economic recovery remains uneven and fluid as COVID-19, vaccination deployments and government policies continue to evolve,” the company said in a statement.
3M said it expects a raw materials and logistics charge of between 30 cents and 50 cents per share in 2021, compared with a prior forecast of flat to a 10 cent hit.
Many U.S companies, including FedEx (FDX.N) and General Motors (GM.N), were forced to temporarily shut operations in February as a severe winter storm caused power outages and gas shortages in parts of the country.
In the first quarter, 3M beat profit and revenue estimates, benefiting from people buying more products to stave off potential coronavirus infection, including 3M’s N95 masks, which provide a high level of filtration against airborne contaminants.
General cleaning equipment has also been in high demand as people stay at home to avoid contracting the virus.
Sales in the company’s safety and industrial unit jumped 13.7% to $3.3 billion in the quarter ended March 31, boosted by demand for personal safety products, roofing granules and industrial adhesives.
Net income attributable to 3M rose 24.2% to $1.62 billion, or $2.77 per share, from a year earlier. Analysts on average had expected the company to earn a profit of $2.29 per share, according to Refinitiv data.
Net sales rose 9.6% to $8.85 billion, beating Wall Street estimates of $8.47 billion.