3M Co (NYSE: MMM) shares lost more than 9.5% in premarket trading Thursday, after the company reported first quarter earnings and revenue that fell short of Wall Street expectations.
The U.S. manufacturing conglomerate also slashed its adjusted profit guidance for the full year, and announced plans to shed 2,000 jobs globally as part of a restructuring it has begun. 3M hopes to save between $225 million to $250 million a year through its restructuring actions.
Shares of the company weighed heavily in the Dow Jones Industrial Average. As of 10:15 a.m. ET, the price-weighted index was down 245.02 points, or 0.92% to 26,352.03.
MMM Earnings & Outlook
3M posted net income of $891 million, or $1.51 per share, down from $602 million, or $0.98 per share, in the prior-year period. Adjusted for one-time items, earnings came to $2.23 per share compared with $2.50 per share in the period a year ago. Analysts surveyed Refinitiv had been expecting adjusted earnings of $2.49 per share.
Net revenue tailed up to $7.86 billion, down 5% from $8.28 billion in the March quarter of the previous year. On average, analysts were forecasting net revenue of $8.025 billion according to Refinitiv.
3M’s industrial revenue came to $2.9 billion, down 6.6% and below analysts’ estimate of $3.1 billion. Revenue from the health care division was pegged at $1.5 billion, up 0.3% and above expectations of $1.55 billion. Its safety and graphics brought in revenue of $1.7 billion, up 4.2% but below $1.77 billion estimates.
For the full year, the company guided earnings of between $9.25 per share and $9.75 per share compared with its previous forecast of $10.45 per share to $10.90 per share. Analysts expect the company to come out with earnings of $10.52 per share in 2019.
3M CEO Comments
“The first quarter was a disappointing start to the year for 3M. 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,” said Mike Roman, 3M chief executive officer. “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.”
3M Company Profile
3M Co is a diversified industrials business that has been in existence since 1902, when it was the Minnesota Mining and Manufacturing Company. Known for its research and development prowess, 3M is organized into five business groups: industrial, safety and graphics, healthcare, electronics and energy, and consumer.
About 60% of the company’s revenue comes from outside the United States, with the industrial segment constituting a plurality of the firm’s net sales. Many of the company’s 55,000-plus products touch and concern a variety of consumers and industries.