3M Company (MMM Quick QuoteMMM - Free Report) has announced that it will cease manufacturing harmful chemical, per- and polyfluoroalkyl substance (PFAS) and discontinue its use in products by the end of 2025.

The move comes amid regulatory pressure to restrict the use of PFAS and customers increasingly looking for alternatives to the harmful substance. MMM said that the use of PFAS in products has weighed on its results over the past few years. The usage of PFAS has also resulted in the company facing lawsuits, which could result in billions of dollars in damages.

3M has already minimized the usage of PFAS over the past three years and aims to continue developing solutions for customers to replace this harmful chemical. MMM’s chairman and chief executive officer, Mike Roman, said, “This action is another example of how we are positioning 3M for continued sustainable growth by optimizing our portfolio, innovating for our customers, and delivering long-term value for our shareholders."

3M Company Price

3M Company price | 3M Company Quote

3M does not expect a significant impact of the cessation of the use of PFAS across its product portfolio. The company’s current annual net sales of manufactured PFAS are approximately $1.3 billion, which represents only about 3.7% of the total revenues generated in 2021.

However, MMM expects to incur pre-tax charges of approximately $1.3-$2.3 billion in connection to the discontinuation of PFAS manufacturing. For the fourth quarter of 2022, the estimated charge is between $0.7 billion and $1.0 billion.

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3M currently carries a Zacks Rank #3 (Hold).

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