🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

3M forecasts 2020 profit below estimates on weak China demand

Published 01/28/2020, 08:34 AM
© Reuters. The logo of 3M is seen at the 3M Tilloy plant in Tilloy-Lez-Cambrai
MMM
-

(Reuters) - U.S. industrial giant 3M Co (N:MMM) forecast 2020 profit below expectations and narrowly missed quarterly revenue estimates on Tuesday, as it continues to face sluggish demand in China, sending its shares down 2.8% in early trading.

3M, which makes everything from adhesive tapes to air filters, also said it would cut 1,500 jobs globally as it continues to restructure its businesses to boost growth.

Sales in Asia-Pacific fell for the fifth straight quarter, hurt by weak demand from China's automotive and electronics sectors. It had forced the company to cut jobs and production last year.

China's economic growth expanded at its slowest pace in almost three decades in 2019 amid a bruising trade war with the United States that hit factory production.

Sales in Asia-Pacific fell 1.7%, while Europe, Middle East and Africa reported declines of 2%. Sales in the United States rose 7.4%.

"The sales performance suggests any recovery will be gradual," Barclays (LON:BARC) analyst Julian Mitchell said.

Sales at its healthcare unit rose about 25.4% on strength in international markets and was flat at its consumer unit. The company's healthcare unit sells everything from surgical tapes to sterilization products and accounted for about 25% of its total revenue in the quarter.

The company said it expects 2020 profit to be between $9.30 per share and $9.75 per share. At the midpoint of the range, it was below the average analysts' estimate of $9.61 per share.

Net income attributable to 3M fell 28% to $969 million, largely due to restructuring and litigation charges.

On an adjusted basis, 3M earned $2.15 per share, beating expectations of $2.10, according to IBES data from Refinitiv.

© Reuters. The logo of 3M is seen at the 3M Tilloy plant in Tilloy-Lez-Cambrai

Net sales fell 2.1% to $8.11 billion and missed expectations of $8.12 billion.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.