MMM 3M Company

By Austen Hufford 

3M Co.'s sales rose for the September quarter as it gained from personal-safety and home-improvement products, though profit fell as expenses grew and demand for products serving industries affected by the Covid-19 pandemic continued to decline.

The manufacturer said Tuesday that demand for those and other goods boosted U.S. sales in its latest quarter, offsetting lower sales for products including office supplies and materials used in nonemergency medical procedures.

"Covid-19 is rapidly changing the global economy and the way people live, work, and communicate," Chief Executive Mike Roman told analysts. "Our entire business portfolio has been impacted one way or another by Covid-19."

The company's shares fell 0.9% to $164.51, as the company said nonemergency procedures were unlikely to recover through next year. 3M didn't provide a full financial outlook due to uncertainty about the course of the pandemic.

3M said sales of N95 and other masks were $235 million higher than in the same quarter a year before. The company said it has sold 1.4 billion of the masks so far this year and plans to have sold 2 billion by the end of 2020. 3M said it would be able to make 2.4 billion N95 masks annually by the end of 2020, more than triple its pre-pandemic production capacity.

A new surge of coronavirus cases in the U.S. and around the world this month has brought renewed attention to the needs for protective equipment by health-care workers in hospitals and nursing homes.

"We continue to experience unprecedented levels of demand for respirators globally," 3M Financial Chief Monish Patolawala said on a conference call.

The company said its global sales grew 0.9%, excluding acquisitions and currency movements, including a 5% increase in the U.S. and 8% in China.

Growth was driven by products directly related to the pandemic -- such as cleaning supplies -- as well as changes in what consumers are buying. 3M, like some other manufacturers, has seen increases in demand for products consumers are using to maintain and improve their homes, like painters tape.

Still, other markets have remained weak, and 3M said sales were down in about half its business lines from a year earlier. Total sales through the first three quarters of this year are down 1.8% compared with the same period a year earlier.

3M, which sells teeth polishing systems and many other products to dentists and health-care providers, said nonemergency procedures remain significantly below 2019 levels.

The St. Paul, Minn., manufacturer said its sales rose 4.5% to $8.35 billion for the third quarter. The company had expected sales of $8.2 billion to $8.3 billion, and analysts polled by FactSet had expected $8.31 billion.

The company posted a profit of $1.41 billion, or $2.43 a share, compared with $1.58 billion, or $2.72 a share, in the same period last year. Excluding items, earnings were also $2.43 a share, topping analysts' expectations.

--Dave Sebastian contributed to this article.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

October 27, 2020 11:06 ET (15:06 GMT)

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