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3M announced earnings per share of $2.16 on revenue of $8.08 billion, ahead of expectations EPS of $2.03 on revenue of $7.91 billion. This compared with EPS of $2.23 on revenue of $7.86 billion in the same period a year ago.
At 6:55 AM ET (1055 GMT), shares in 3M are trading 1.6% higher premarket.
“Given the breadth and diversity of our businesses, the financial impact of Covid-19 is varying across 3M,” said Mike Roman, 3M chairman and chief executive officer. “In the first quarter we saw strong growth in personal safety, as well as in other areas of our portfolio experiencing high demand due to the pandemic. At the same time, we experienced weak demand in several end markets that were more severely impacted by actions taken around the world to slow the pandemic.”
3M decided to withdraw its previously communicated full-year 2020 outlook given the evolving and uncertain impact of the Covid-19 pandemic, and will reduce its full-year 2020 cap-ex plan to approximately $1.3 billion versus $1.6 to $1.8 billion, previously.
The company added that it was prioritizing organic investments and the dividend, but had suspended its share repurchase program.
“Demand for 3M’s industrial products is getting hit from all directions after the Covid-19 pandemic. Plunging rates of domestic car production, collapsing shale-drilling activity and slack demand from China will all weigh on 3M future growth,” said Haris Anwar, an analyst at Investing.com.
“That strain could be countered somewhat by the health-care division, a recent bright spot as countries line up to secure supplies of masks and ventilators. But that business alone isn’t going to be a game-changer for the company which is in a deep downturn mode.”
3M shares are down 12% from the beginning of the year. They are under-performing the S&P 500 which is down 11.29% year to date.
