3M’s dark chapter deepens as CEO faces beaten down investors

3M has so many big problems on its hands that one veteran Wall Street analyst likened the conglomerate’s challenges to the Titanic – just after the iceberg.

“We’re talking more about rearranging the deck chairs when you’ve got these big calamities bearing down on the company,” said Deane Dray, an RBC Capital Markets analyst who has covered 3M for nearly 20 years.

That may sound like hyperbole for one of the longest-tenured components of the Dow Jones Industrial Average that generates more than $30 billion in sales and showers investors with $3 billion in annual dividends.

Yet the magnitude of what 3M is confronting is immense.

Wall Street expects 3M will post its sixth-straight quarter of declining sales when it reports results on Tuesday as demand continues to slump across much of its vast portfolio.

The bigger worry is that potentially billions of dollars in legal liabilities will consume huge amounts of cash for years to come and put its cherished dividend at risk.

The company, based in St. Paul, Minnesota, is a central defendant in a sprawling courtroom brawl over so-called forever chemicals that stands to be one of the largest pollution cases in history.

It recently agreed to pay out as much as $12.5 billion for just one tranche of claims it faces over the chemicals, with several more remaining.

It’s also in confidential mediation to resolve more than 200,000 lawsuits alleging faulty earplugs it supplied to U.S. combat troops led to hearing damage.

Analysts expect a resolution to cost several billions of dollars on its own.

All that leaves Chief Executive Officer Mike Roman, a 35-year company veteran who became CEO five years ago, few tools at his disposal to break 3M out of its morass.