By Dhirendra Tripathi
Investing.com – 3M stock (NYSE:MMM) fell 1.2% on reports the company sees an impact at the higher end of its forecast because of the rising cost of raw materials.
The company had earlier guided for an impact of 65 cents to 80 cents on FY21 EPS because of chip shortages. In July, the company guided for a revised EPS of $9.70 to $10.10 from $9.45 at the center of the earlier range. Now, the company expects rising material prices to have a bigger effect on EPS, according to 3M Executive Vice President and Chief Financial Officer Monish Patolawala, who spoke at the Morgan Stanley (NYSE:MS) Virtual 9th Annual Laguna Conference on Monday.
According to Newsquawk, the CFO said the company is seeing broad-based inflation in resins, polypropylene, ethylene and wood pulp. Staff costs have gone up, too, he said.
The global chip shortage is also a problem. Given the shortage of chips all manufacturers -- from mobile phones to cars -- are facing, pain in the supply chain for companies like 3M could last longer. Consumers could ultimately pay in the form of higher retail prices.