In 2022, 3M saw a 3.2% drop in revenues from the previous year, and a miss on earnings targets. As a result it is reducing its workforce by 2,500 because of the loss of production volumes.
“As a bellwether for the sector, 3M’s outlook of broad-based weakness across industrial and consumer markets could portend worsening conditions for other industrials,” Karen Ubelhart, an analyst at Bloomberg Intelligence, wrote in a research note following the earnings report.
Bloomberg
The results do have some implications for the display market. In a call with investors, the company provided input and guidance, and the isolated information on display technologies is useful. End-market demand for TVs, tablets, and smartphones is down as well as a shift from LCD to OLED (3M’s IP in optical films and metal mesh conductor technology is pretty significant).
Like most anyone in displays, 3M is feeling some pain and making adjustments to its LCD-OLED product mix, and has expanded into VR and AR displays, seeing them as growth opportunities. 2022-2023 is a transitionary period not helped by uncertain end demand and the inflationary hit on supply chains, as well as inventory reductions by 3Ms customers. J
A combination of transitions in technology, inventory reductions in the channel, and lower end user demand seems to be about par for the course for all display companies. On the bright side, automative electronics were up 4% and the company is investing in next generation technologies. It just may have not been prepared enough for a transitionary period like this.
