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

BLK Earnings: BlackRock Q2 2024 profit jumps on higher revenues

Asset management company BlackRock, Inc. (NYSE: BLK) on Monday reported a double-digit increase in adjusted profit for the second quarter of 2024, aided by an 8% increase in revenues. Second-quarter

GS Earnings: All you need to know about Goldman Sachs’ Q2 2024 earnings results

The Goldman Sachs Group, Inc. (NYSE: GS) reported its second quarter 2024 earnings results today. Net revenues were $12.73 billion, up 17% compared to the same period a year ago,

Intuitive Surgical likely to report strong revenue, profit growth for Q2 2024

Intuitive Surgical, Inc. (NASDAQ: ISRG) is expected to report its second-quarter earnings next week, amid expectations for strong revenue and profit growth. The medical device maker is thriving on the

Add Comment
Viewing Highlight