3M profit misses as coronavirus crisis hammers sales

Industrial conglomerate 3M missed Wall Street estimates for quarterly profit and revenue on Tuesday, hurt by a plunge in demand across its business units due to the economic impact of the coronavirus crisis.

3M is the world’s biggest producer of N95 respirator masks and has seen demand surge as governments globally fought over supplies of protective equipment for health-care and other essential workers.

However, sales of the wide range of office and industrial supplies it churns out have declined as global economic activity sank and millions of employees retreated to working from home

Its shares fell about 3% to $158.6 in premarket trading.

Revenue at 3M’s transportation and electronics division, which sells everything from protective films to adhesives for automakers, fell 20.9% and accounted for about 27% of its total revenue.

The company also reported strong declines in demand for oral care and aerospace products and net sales for the quarter fell slightly more than expected to $7.2 billion from $8.2 billion.

Reflecting the boom in mask sales, it saw strong growth in personal safety, as well as in areas such as automotive electronics, and home care and improvement.

It said it was on track to meet a promise to double production of the N95 masks, which filter 95% of airborne particles, to 2 billion for the year, having sold some 800 million so far.

By region, sales in Asia-Pacific, 3M’s biggest market outside the United States, fell 8.5%, while Europe, Middle East and Africa posted declines of 16.4%. Sales in the United States fell 12.7%.

3M again declined to give a financial outlook, citing uncertainty around the pandemic.

Its operating expenses fell 16% to $5.4 billion, as the company cut $400 million in costs.

On an adjusted basis, however, the maker of Post-it notes earned $1.78 per share in the quarter, just below analysts’ expectations of $1.80 per share.