Shares in US industrial giant 3M plummet following weak results
Shares in US industrial products group 3M have tumbled after the company today posted weak first quarter results and said it would slash 2,000 jobs as part of a restructuring.
Read more: Shares in bellwether company Caterpillar fall following mixed results
The Post-it Note maker also cut its earnings forecast due to ongoing poor performance in key markets such as China. Its share price fell 11 per cent to $195.25 (£151.42).
The figures
3M’s income before tax was $1.09bn in the three months to 31 March, compared to $970m in the same period a year before.
The Minnesota-based company’s net sales fell five per cent to $7.86bn compared to $8.28bn a year earlier.
Its cash flow for the first three months of the year was $1.05bn.
3M’s net debt rose to $12.85bn compared to $11.35bn in the first quarter of 2018.
Its adjusted earnings per share fell 11 per cent to $2.23, compared to $2.50 a year earlier, missing analysts’ expectations of $2.49.
Why it's interesting
3M, a blue-chip company that is seen as a bellwether of economic activity, dragged down the Dow Jones industrial average stock index today, which fell 0.6 per cent.
Investors sold off their 3M shares in reaction to its poor performance in Asia Pacific, its second biggest market, where sales fell seven per cent year on year, and to it cutting its 2019 earnings forecast by around $1.20 per share.
The company’s results came a day after fellow bellwether Caterpillar revealed falling sales in Asia Pacific. Both companies’ results point to slowing growth in China.
What 3M said
“The first quarter was a disappointing start to the year for 3M,” said Mike Roman, 3M chief executive. “Our operational execution also fell short of the expectations we have for ourselves.”
Read more: US manufacturing growth slows as trade tensions begin to take toll
He said: “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.”