3M stock price jumps 4% on earnings boost

Shares of 3M (NYSE:MMM) gapped 4% higher today after the company reported stronger-than-expected first-quarter results. The surge in sales came mostly from a strong performance in health-care and personal-safety-equipment operations amid the COVID-19 outbreak.

Fundamental analysis: 3M boosts Wall Street

The industrial conglomerate 3M announced that it earned $2.16 a share from $8.1 billion in sales, which is higher than the market expectations of $2.03 per share earnings and $7.9 billion in sales.

“In this unprecedented time, I could not be more proud of how our 96,000 people have stepped up to help fight COVID-19, and I thank all 3Mers for their incredible efforts,” 3M chairman & CEO Mike Roman said.

“We are attacking the pandemic from all angles, which includes mobilizing all of our resources and rapidly increasing output of critical supplies to healthcare workers and first responders.”

Sales grew 2.7% as the manufacturing giant ramped up production of personal safety items amid the coronavirus outbreak, namely the N95 respirator masks that are in extremely high demand.

Just last week, the company was awarded a $76 million contract from the Trump administration to produce more masks. 3M said that it doubled global respirator output to 100 million per month, out of which 35 million is the U.S. market.

“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. Looking ahead, 3M is taking action that will help us navigate near-term uncertainty, generate strong cash flow, and lead out of the slowdown by delivering for employees, customers and shareholders,” added Roman.

Technical analysis: Stock price struggles to consolidate gains

3M stock price hit a 10-week high above the $160 mark following a release of the Q1 earnings report. However, the price action seems reluctant to stay above $160 as it almost immediately dropped a few dollars lower, to cut its earlier gains by 2%.

As you can see in the daily chart, the price action has been rejected by the 200-DMA at $161.95 and it is now testing the 100-DMA, which acts as an intraday support. Therefore, today’s close will be important to help us determine the future as a close above both moving averages is likely to provide a major boost for the buyers.

Summary

Shares of 3M surged 4% higher at the New York open today after the manufacturing conglomerate reported better-than-expected Q1 sales on the back of the rise in sale of personal safety items.