Categories Earnings, Industrials

3M’s stock plummets 7% on weak Q1 results, lower guidance and job cuts

3M Company’s (NYSE: MMM) shares tumbled 7.4% in premarket hours on Thursday after the consumer products firm missed market estimates on both revenue and earnings for the first quarter of 2019, lowered its full-year guidance and announced a restructuring that would result in the loss of 2,000 jobs.

Total sales of $7.9 billion decreased 5% year-over-year, hurt by lower sales across most of the company’s business units. Organic local currency sales dropped 1.1%.

3M Company reports first quarter 2019 earnings results

On a GAAP basis, net income attributable to 3M grew 48% year-over-year to $891 million while EPS grew 54% to $1.51. Adjusted EPS fell 10.8% to $2.23.

CEO Mike Roman said, “We continued to face slowing conditions in key end markets which impacted both organic growth and margins, and our operational execution also fell short of the expectations we have for ourselves. As a result, we have stepped up additional actions – including restructuring – to drive productivity, reduce costs, and increase cash flow as we manage through challenges in some of our end markets.”

Sales inched up slightly by 0.3% in the Health Care segment while all other units reported declines. The highest decline of 11.8% was in Electronics and Energy followed by a 6.6% drop in Industrial. Safety and Graphics decreased 4.2% while Consumer fell 1.9%.

In the US, sales grew by 0.1%. The EMEA region saw a decline of 9.4% while Asia Pacific fell 7.4%. Sales in Latin America/Canada dropped by 6.5%.

Also see: 3M Company Q1 2019 Earnings Conference Call Transcript

3M announced a major restructuring across all its business groups and geographies that will result in around 2,000 jobs being cut worldwide. This decision points to a slower-than-expected 2019. The company estimates annual pre-tax savings of $225 million to $250 million, with $100 million in the remainder of 2019. 3M anticipates a pre-tax charge of approx. $150 million, or $0.20 per share in 2019.

3M updated its GAAP EPS guidance for 2019 to be in the range of $8.53 to $9.03. Adjusted EPS is expected to be $9.25 to $9.75 versus a prior expectation of $10.45 to $10.90. Organic local-currency sales growth is expected to be in the range of minus 1% to plus 2% versus a prior range of 1-4%. The return on invested capital is expected to be 20-22% versus the prior outlook of 22-25%.

 

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

Infographic: Nvidia (NVDA) Q4 revenue up 61%; earnings beat

Nvidia Corporation (NASDAQ: NVDA) Wednesday said its fourth-quarter revenues and profit increased in double-digits amid elevated demand. The results also topped the Street view, driving the stock higher during the

Nutanix (NTNX) Earnings: 2Q21 Key Numbers

Nutanix (NASDAQ: NTNX) reported second quarter 2021 earnings results today. Total revenue remained flat at $346.4 million compared to the same period a year ago. GAAP net loss was $287.3

Macy’s (M) expects digital channels to generate approx. $10 billion in sales by 2023

Shares of Macy’s Inc. (NYSE: M) were down 2.7% in morning trade on Wednesday. The stock has gained 37% since the beginning of the year. A day ago, the retailer

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top