3M says financial guidance does not cover possible litigation costs
of 3M (NYSE:MMM) earnings guidance for 2023 does not include potential litigation costs related to earplugs manufactured for the military and the manufacture of what is known as “forever chemicals,” the company’s chief financial officer told know on Thursday.
“We cannot predict what that number will be and therefore the guidance we have given you about [adjusted] EPS between $8.50 and $9 does not include those litigation matters,” said Monish Patolawala, the company’s chief financial officer and transformation officer. say at Bank of America Global Industry Conference. “Quarterly, as we go through the quarter, we’ll show you what the reality is.”
3M (MMM), best known for making Scotch tapes and Post-It Notes, is embroiled in two legal disputes over potential debts that analysts estimate could cost the company billions of dollars. la.
More than 200,000 veterans have sued 3M subsidiary Aearo Technologies, alleging that its foam earmuffs are faulty and do not protect them from hearing loss. 3M (MMM) argued that earplugs worked properly when soldiers were trained in how to use them.
3M (MMM) was also sued for generating perfluoroalkyl or polyfluoroalkyl substances (PFAS) that contaminate soil and drinking water. They are called “forever chemicals” because they take a long time to break down.
The chemicals used to create firefighting foam. 3M (MMM) would supposedly argue that because the products were manufactured to order by the US military, they had legal immunity. 3M (MMM) last year announced plans to discontinue PFAS production by the end of 2025.
3M (MMM) is awaiting a court ruling scheduled for next month, Patolawala said. One will determine whether 3M (MMM) is part of Aearo’s bankruptcy and the rest will decide whether Aearo can file for bankruptcy. In early May, appeals against two earplug lawsuits will be heard.
Patolawala said keep an eye on legal records for more details on litigation costs.
“Just make sure you’re reading our ‘K’ and ‘Q’ not only on combat weapons and the updates to this, but on all our litigation matters because we try to make sure we’re as comprehensive as possible about that,” he said.