Shares of 3M gained $8.58, or 4.78% to $188.00 before the opening Thursday, after the U.S. manufacturing conglomerate published second-quarter financial results. The company missed Wall Street expectations for revenue and profit, but maintained its full-year profit guidance.
3M reported a 39% decline in quarterly profit, which it attributed to a slump in global economic growth. The financial results came only a few months after the Maplewood, Minnesota-based company announced 2,000 layoffs, citing weak demand for products sold to China’s electronics and automotive sectors.
As of 10:56 a.m. ET, 3M shares were up $2.60, or 1.45% to $181.97. The stock has gained more than 4% so far in 2019 and 9% in the past 12 months.
MMM Earnings & Outlooks
3M had net income of $1.13 billion, or $1.92 per share, compared with net income of $1.86 billion, or $3.07 per share, in the same period last year. Adjusted for special items, earnings came to $2.20 per share, down 28.3% from $3.07 in the earlier-year period.
Analysts were expecting the company to post adjusted earnings of $2.05 per share, according to Refinitiv data. Companywide revenue came in at $8.17 billion, a decline of 2.6% from the second quarter of the previous year, but ahead of the analysts’ consensus of $8.02 billion.
3M continued to struggle with weak demand in China’s automotive and electronics sectors. The company saw revenue decline 3.5% in Asia-Pacific – its largest market outside the United States.
For the full year, the company still views adjusted earnings of between $9.25 to $9.75 per share. However, 3M trimmed its full-year GAAP earnings forecast due to a $0.28 charge related to the deconsolidation of its Venezuelan subsidiary.
The company now expects 2019 GAAP earnings of between $8.25 to $8.75 per share, compared with its previous guidance of $8.53 to $9.03 per share.
3M CEO Comments
“I am encouraged by our company’s progress and performance in the second quarter,” commented Mike Roman, 3M chairman and chief executive officer. “Our execution was strong in the face of continued slow growth conditions in key end markets, as we effectively managed costs and improved cash flow. Moving ahead we remain focused on continuing to drive operational improvements, investing for the future and delivering for our customers and shareholders.”
3M Company Profile
3M is a diversified industrials business that has been in existence since 1902, when it was Minnesota Mining and Manufacturing. Known for its research and development prowess, 3M is organized into four business segments: safety and industrial, transportation and electronics, healthcare, and consumer.
About 60% of the company’s revenue comes from outside the United States, with the industrial segment constituting most of the firm’s net sales. Many of the company’s 55,000-plus products touch and concern a variety of consumers and industries. – Warrior Trading News