3M Sales Hit by Weakness in China, Car Production -- Update
24 Octobre 2019 - 06:59PM
Dow Jones News
By Austen Hufford and Patrick Thomas
3M Co. posted lower quarterly sales and cut its profit
expectations for the year, saying weakness in China and key
industries have lowered demand, the latest global manufacturer to
be hit by a slowing global economy.
The maker of everything from Post-it Notes to molar crowns on
Thursday said revenue fell in about one-third of its markets.
Revenue excluding currency fluctuations and acquisitions declined
1.3%, including a 9.4% drop in China.
The company said its business serving car makers and electronics
companies was also soft in its third quarter.
Shares of the company fell 4.8% in midday trading, dragging down
the Dow Jones Industrial Average.
"The macroeconomic environment remains challenging," Chief
Executive Mike Roman told analysts on a call Thursday. "We're still
anticipating that slowing in China, automotive and electronics
could continue," he said.
3M, which sells to both consumers and industrial customers, has
been particularly hurt by declining rates of global car production.
The company said its business to car makers was down 3% in the
quarter and was in-line with declines of global car and light-truck
production, but worse than what the company had originally
expected.
The strike by unionized workers at General Motors Co. factories
has hurt car production, but the impact on 3M's results was limited
as the continued stoppage started near the end of its quarter.
The declines in the company's industrial business was partially
offset by growth in its health-care business, which has been a
focus in recent years. This month the company completed its $4.3
billion acquisition of wound-care company Acelity Inc.
3M expects adjusted earnings to be between $8.99 and $9.09 this
year, down from its previous range of $9.25 to $9.75 a share, after
excluding certain one-time charges. The Acelity deal lowered the
new range by 15 cents.
Total revenue fell to $7.99 billion in its latest quarter from
$8.15 billion a year earlier. Analysts had expected $8.17 billion
of revenue in the quarter, according to FactSet.
The St. Paul, Minnesota-based manufacturing conglomerate
reported a profit of $1.58 billion, or $2.72 a share, compared with
$1.54 billion, or $2.58 a share, a year ago. The company's earnings
included a 14-cent gain from the divestiture of its gas and flame
detection business. Analysts polled by FactSet were expecting
earnings of $2.51 a share.
Sales in some of the company's divisions, including health care
and consumer products rose during the quarter. Health-care revenue
grew by 4.7% in the second quarter. Consumer products revenue rose
nearly 2%.
Safety and industrial sales fell nearly 6% to $2.8 billion for
the quarter and in its transportation and electronics business
declined 4.4%.
Write to Austen Hufford at austen.hufford@wsj.com and Patrick
Thomas at Patrick.Thomas@wsj.com
(END) Dow Jones Newswires
October 24, 2019 12:44 ET (16:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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