Categories: world

3M's stock has the worst day since the 1987 stock market crash

The shares in 3M Co ranked their biggest day's decline of over 30 years, after industry, healthcare and consumer products missed profit and revenue expectations, lowered their full-year outlook and said it cut 2,000 jobs. The management acknowledged that what made the results for the first quarter even smelly was that the organization failed to respond fast enough to the weakness, especially in its industrial companies in Asia and the United States Stock MMM, -12.95% fell 1 3%, when volume swelled to 14.5 million shares, compared to the full-day average of about 1.9 million shares. It was by far the biggest decliner in the Dow Jones Industrial Average, with a $ 28.36 price loss, acting as a 192-point draw on the Dow DJIA, -0.51% which dropped 135 points. The decrease also decreased by more than $ 16 billion from the company's market value. The percentage decline was second only to the 26% fall on October 19, 1987. It is the day called Black Monday, with Dow registering its biggest ever a day crash with a 22.6% tumble. The stock sale comes just two days after the stock market closed at one year's maximum of $ 219.50. The company behind brands such as Post-it, Scotch, Nexcare and Command reported earnings for the first quarter before Thursday's opening, with a net income of $ 891 million, or $ 1.51 per share, from $ 602 million or 98 cents per share during the same period a year ago. Excluding non-recurring items, such as…

The shares in 3M Co ranked their biggest day’s decline of over 30 years, after industry, healthcare and consumer products missed profit and revenue expectations, lowered their full-year outlook and said it cut 2,000 jobs.

The management acknowledged that what made the results for the first quarter even smelly was that the organization failed to respond fast enough to the weakness, especially in its industrial companies in Asia and the United States

Stock

MMM, -12.95%

fell 1

3%, when volume swelled to 14.5 million shares, compared to the full-day average of about 1.9 million shares. It was by far the biggest decliner in the Dow Jones Industrial Average, with a $ 28.36 price loss, acting as a 192-point draw on the Dow

DJIA, -0.51%

which dropped 135 points. The decrease also decreased by more than $ 16 billion from the company’s market value.

The percentage decline was second only to the 26% fall on October 19, 1987. It is the day called Black Monday, with Dow registering its biggest ever a day crash with a 22.6% tumble.

The stock sale comes just two days after the stock market closed at one year’s maximum of $ 219.50.

The company behind brands such as Post-it, Scotch, Nexcare and Command reported earnings for the first quarter before Thursday’s opening, with a net income of $ 891 million, or $ 1.51 per share, from $ 602 million or 98 cents per share during the same period a year ago. Excluding non-recurring items, such as litigation costs and the effects of the tax reform, adjusted EPS fell to $ 2.23 from $ 2.50, lacking the FactSet consensus of $ 2.49.

Disputes related fees included the creation of $ 235 million in reserves to address environmental issues related to the manufacture and disposal of waste containing PFASs (perfluorinated compounds) and an increase of $ 313 million in respiratory reserve to resolve current and anticipated future coal mining procedures.

Excluding these fees, the operating margin fell to 21.4% from 23.0% last year.

Sales declined by 5% to $ 786 billion from $ 8.28 billion, under the FactSet consensus of $ 8.03 billion. Geographically, sales fell surprisingly with 0.4% organic in the United States, decreased by 4% in China / Hong Kong and fell 7% in Japan and increased by 1% in Latin America / Canada and EMEA (Europe, Middle East and Africa).

The following table describes how the 3M business segments were performed overall:

Business segments Sales in the first quarter of 2019 Sales (% change) Quarterly change FactSet consensus Operating margin for the first quarter Quarter 2018 margin
Industrial $ 2,929 billion $ 3,135 billion (-6.6%) $ 3,067 billion 20.0% 22.9%
Security and Graphics $ 1,704 billion $ 1,779 health $ 1,540 billion $ 1,535 billion (+ 0.3%) $ 1,553 billion $ 28.1 billion (-4.2%) $ 1,766 billion 23.2% 27.1%
% 29.9%
Electronic and Energy $ 1,190 billion $ 1,350 billion (-11.9%) [19659020] $ 1,248 billion 23.8% [19659020] 24.9%
Consumer $ 1,133 billion 1,145 million US dollar (-1.9%) [11845] 19.5% 19.3% 3M Co.

Analyst Jim Corridore at CFRA repeated his rating at 3M while he lowered his trading price target to $ 205 from $ 215 and said the quarter was “poor across all fronts”.

And kudos to JP Morgan analyst Stephen Tusa, who became even more bearish last month, repeated his underweight and lowered his price target to $ 154 from $ 158, referring to a “clearer trade-off” between sales and margin.

3M lowered its directional range for 2019 adjusted EPS, which excludes trial costs, to $ 9.25 to $ 9.75 from $ 10.45 to $ 10.90.

The company said it took “aggressive action” to improve productivity, reduce costs and increase cash flow, including reducing its staff by 2,000 services across all business groups. This means a reduction of approximately 2.1% in the workforce, based on 93,516 employees at the end of 2018, according to the company’s annual report.

“We continued to face poorer conditions in key end markets that affected both organic growth and margins, and our operational executive has also breached the expectations we have for ourselves,” said Chief Executive Mike Roman, according to a FactSet transcript. 19659002] At the conference after the redemption conference with analysts, Chief Financial Officer Nick Gangestad said the industry sector The company saw a “broad decline in most of its portfolio”, highlighted by a 9% decline in the automotive industry, including a 6% decrease in automotive and light truck buildings. 19659002] As the company witnessed the lower volumes through the quarter, it responded by reducing production at its factories by 4% to 5%. “Unfortunately, we have not been proportionally affected,” Gangestad said on the call.

“[W] I replied. not aggressively enough on what we saw, and then we are behind the curve when we came through the quarter “, added CEO Roman.” D rto go aggressively forward, the actions we are. “

3M’s stock has now risen less than 0.1% so far to date, while the SPDR Industrial Select Sector Exchange Trade Fund

XLI, -2.01%

has risen 19.6% and Dow has gained 13.4%.

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Faela