3M (MMM) Reiterates Long-Term Commitment to Investing in Core Businesses; Cut 1,800 Jobs in Q4; Lowers FY08 EPS Guidance
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3M Company (NYSE: MMM) today announced that it will reiterate its long-term commitment to investing in its core businesses and will outline ongoing actions to address a turbulent global economy.
The company will reaffirm 3M's commitment to its core businesses and to continued investments in emerging markets, such as China, India, the Middle East and Latin America, and its efforts to improve its supply chain and capital efficiency.
3M will also report on aggressive cost-reduction actions in developed economies. These actions include additional restructuring in these markets, deferred merit increases, aggressively reducing indirect costs and adjusting capital expenditures.
In Q4 alone, 3M reduced nearly 1,800 positions across the company, mainly in the developed economies of the U.S., Western Europe and Japan. These actions are expected to provide benefits of $170 million in 2009. The company is also rationalizing 10 manufacturing, technical and office facilities around the world.
As a result of economic realities such as the expected 10% decline in Q4 organic volume and the negative effects of currency, the company adjusted its FY08 EPS guidance from an earlier estimate of $5.40-$5.48 to a revised estimate of $5.10-$5.15, excluding special items.
Given the uncertain duration and depth of the global slowdown, the company estimates FY09 organic volumes to decline in the range of -3% to -7%. In addition, foreign exchange impacts are expected to reduce sales in the range of -6% to -7%. 2009 EPS are estimated to be in the range of $4.50-$4.95 and margins are expected to be consistent with 2008 levels, excluding special items.
3M Company, together with its subsidiaries, operates as a diversified technology company worldwide.
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