3M Co. cut its 2008 earnings outlook amid slumping volume and projected 2009 profits below analysts' estimates as the demand woes are expected to continue and warrant further cost-cutting by the manufacturing giant."During these difficult economic times, we will continue to aggressively manage our costs," said Chairman and Chief Executive George Buckley ahead of an investor and analyst meeting later Monday, at which the company will detail how it will react to the slumping global economy.
Like many firms with a global presence, 3M has seen demand for many of its products decline amid the economic slowdown. Its display and graphics division, which makes films that brighten screens on flat-screen televisions and computer monitors and was once one of its most profitable, has been hit particularly hard by increased competition and lower demand for the goods on which the films are used.
Citing an expected 10% decline in fourth-quarter volume, excluding acquisitions, and unfavorable currency rates, 3M lowered its 2008 earnings estimate to $5.10 and $5.15 a share from October's view of $5.40 and $5.48.
Organic volume is expected to fall 3% to 7% next year, with the stronger dollar resulting in sales being 6% to 7% lower than the otherwise would have. As such, 3M projected 2009 earnings of $4.50 to $4.95 a share on margins "consistent with" 2008. Analysts surveyed by Thomson Reuters were expecting earnings of $5.31.
The company announced Friday that it is cutting 1,800 jobs and urging some workers to take time off without pay or take vacation time in December. The company had about 75,000 employees and those job cuts are expected to save the firm $170 million next year.
