3M (MMM) Reaches $5.5B Deal to Settle Earplug Cases, Stock Up
Per reports, 3M Company MMM has entered into a tentative deal of $5.5 billion to settle more than 300,000 lawsuits by veterans, who accused the company of selling defective combat earplugs. Following this news, shares of the company jumped 5.2% at the close of business on Aug 28.
The $5.5 billion funding is expected to be paid in the next five years. 3M has been fighting legal battles related to its earplugs for years. Veterans had claimed that combat earplugs caused them hearing loss, while MMM contended that the earplugs offered protection to soldiers while allowing them to hear on the battlefield.
The combat earplugs supplied to the U.S. military were developed by 3M’s subsidiary, Aearo Technologies LLC. In July 2022, MMM put Aearo Technologies into bankruptcy to shield itself from the lawsuits. Per rules, companies that file for bankruptcy usually get some respite from lawsuits. However, the U.S. court denied a preliminary injunction to MMM’s lawsuits.
3M Company Price
3M Company price | 3M Company Quote
Per reports, 3M has lost in 10 of the 16 trials, with about $300 million being awarded to plaintiffs. The $5.5 billion settlement is much higher than $1 billion Aearo Technologies had set aside in a trust to compensate veterans and settle the lawsuits.
Apart from this earplug case, 3M has been embroiled in lawsuits related to the manufacture of the harmful chemical, per- and polyfluoroalkyl substance (“PFAS”). In June, the company reached an agreement to pay at least $10.3 billion to settle claims with several public water systems (“PWS”) in the United States associated with the presence of PFAS in drinking water.
As part of the settlement, 3M will provide funding of up to $12.5 billion to PWS over a period of 13 years for testing the presence of PFAS and treating it. Upon receiving court approval, the settlement will free MMM from any claims associated with the usage of PFAS in drinking water.
Zacks Rank & Other Stocks to Consider
3M presently carries a Zacks Rank #2 (Buy).
Some other top-ranked industrial stocks are as follows:
Flowserve Corporation FLS presently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four-quarter earnings surprise of 6.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Flowserve has an estimated earnings growth rate of 79.1% for the current year. The stock has jumped 26.6% so far this year.
Graham Corporation GHM currently flaunts a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 243.1%, on average.
Graham has an estimated earnings growth rate of 400% for the current fiscal year. The stock has rallied 65.8% so far this year.
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