3M Benefits From Higher Demand for Face Masks, Consumer Goods -- Update
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
"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 email@example.com
(END) Dow Jones Newswires
October 27, 2020 11:06 ET (15:06 GMT)
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