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3M adjusts dividend policy after SOLVENTUM spin-off
3M shares experience price jump: Dividend policy adjusted after healthcare division goes public. 3M increases profit expectations in the first quarter. Analysts analyze. Find out now!
3M adjusts dividend policy after SOLVENTUM spin-off
The conglomerate 3M has adjusted its dividend policy after the healthcare division SOLVENTUM was spun off. The company announced that it would distribute around 40 percent of the adjusted free cash flow to shareholders. Although this is less than last year, it did not surprise analysts due to the SOLVENTUM deal. In the first quarter, 3M beat earnings expectations and saw its share price rise in premarket US trading.
In the past quarter, 3M's sales remained stable at around $8 billion, while surplus fell by 5 percent to $933 million. However, adjusted earnings per share rose more than a fifth to $2.39, beating analysts' expectations. The company gave full-year guidance of $6.80 to $7.30 per share, excluding its healthcare division in its first-quarter numbers.
SOLVENTUM's IPO raised almost $8 billion to 3M, with the company still holding about 20 percent to be sold over the next 5 years. Due to billions of dollars in settlements related to defective earplugs and dangerous chemicals that caused the company losses in 2023, 3M can put the money to good use.
Shares of 3M rose 4.72 percent to $96.51 on the NYSE, while SOLVENTUM shares fell 1.37 percent to $65.01. The adjustment of 3M's dividend policy following the IPO of its healthcare division SOLVENTUM reflects strategic changes and the pursuit of efficient use of resources. Investors will be keen to see how the new policy will impact investor returns and the company's market performance.