Inflation and supply chain problems: the two factors nearly every company now cites to explain financial results are also to blame for 3M’s lower profit last quarter.
The Maplewood-based company on Tuesday beat analyst estimates for the last three months of 2021, reporting a $1.3 billion profit on $8.6 billion in sales.
For its fourth quarter ending Dec. 31, 3M posted flat sales and a 4.7% drop in profit compared to the same period a year ago, a better performance than company leaders anticipated.
“Our team effectively managed supply chain disruptions, made good progress on pricing actions and controlled costs,” 3M chief executive Mike Roman said in a statement.
The industrial giant’s sales increased 0.3% for the three-month period as it increased prices for its products 2.6%.
A semiconductor shortage, shipping, warehouse and labor challenges, the pandemic and last February’s major winter storm all contributed to “inflationary pressures throughout the year,” said Monish Patolawala, 3M’s chief financial and transformation officer. Price increases helped offset the increased cost of doing business.
“I think the first half is going to be tougher than the second half of 2022 when it comes to inflation,” he said during a call with investors Tuesday. “We are still seeing sequential increases, but slower, which is good.”
For the entirety of 2021, sales rose nearly 10% year-over-year to $35.3 billion. Profit rose 8% to $5.9 billion.
Each of the company’s four business segments saw growth over the year. In the fourth quarter, sales dropped in the safety and industrial and transportation and electronics units and rose slightly in health care and consumer.
The company’s stock slid about 1.5% in mid-morning trading Tuesday on an overall down day for the market so far.
