- 3M sales decline by 11% in April as Covid-19 pushed factories into temporarily shutting down.
- Transportation and electronics business took the lead with a 20% decline in sales in April.
- The American multinational conglomerate saw a 5% growth in sales in its Healthcare business.
In a report on Thursday, 3M Co. (NYSE: MMM) said that its sales in April were noted 11% down to £1.88 billion as the Coronavirus pandemic pushed its factories into a temporary shutdown. While COVID-19 fuelled demand for face masks, the company added, it weighed on the rest of its product line that includes items like industrial glues.
3M fell roughly 2.5% in the stock market on Thursday in the morning session but recovered almost all of the loss later in the day.
Transportation and electronics business posts a 20% decline in sales
3M’s transportation and electronics business took the lead with a massive 20% decline in sales last month that was followed by an 11% slump in sales in its safety and industrial division. The company also saw a 5% decline in sales its consumer segment and a 5% growth in sales in its healthcare division in April.
Adjusted for selling-price and volume also commonly called the organic local-currency sales printed a 12% decline in April. As per 3M, acquisitions and divestitures pushed its sales up by 3% that was offset by a 2% drop in sales ascribed to foreign-currency translation.
With respect to regions, sales were lowest in the Americas with a 13% decline followed by a 12% drop in the Middle East and Africa. Lastly, 3M’s sales tanked 5% in the Asia Pacific in April.
According to the company, demand in various end markets including electronics, personal safety, food safety, general cleaning, and biopharma filtration remained in place. Other end markets like general industry, automotive, and stationery and office saw weaker demand in April.
CEO Mike Roman’s comments on the sales report
According to CEO Mike Roman of 3M:
“April sales results were largely in line with month to date trends we discussed during our first-quarter earnings call.”
3M released its first-quarter results in the last week of April that topped analysts’ estimates for earnings and revenue. The company had also recorded a 2.7% increase in sales in the first quarter.
At £111.62 per share, the American multinational conglomerate is currently around 25% down year to date in the stock market after recovering from £96.39 per share in March. Its performance in 2019 was not reported encouraging either with an annual loss of roughly 8%.
At the time of writing, 3M has a market cap of £63.96 billion and a price to earnings ratio of 15.96.