3M Co. reported falling revenue in the U.S. and some other top markets and set plans for a second round of layoffs in less than a year.
The maker of everything from Post-it Notes to industrial sandpaper reported a fourth-quarter revenue decline of 2.6% when excluding currency movements and acquisitions, including a 2.9% drop in the U.S. 3M said it was eliminating 1,500 jobs as part of a broad restructuring to streamline its global operations. 3M employs 96,000 people.
"We continued to face growth challenges," Chief Executive Mike Roman told analysts on a call Tuesday. Shares fell 2.35% in premarket trading.
The St. Paul, Minn.-based company sells its diverse array of products in a wide swath of the economy, including consumers, offices, manufacturers and hospitals. Lately, some of 3M's main markets have weakened, including the U.S. manufacturing sector. Slow rates of car and electronics production in the U.S. continued in the fourth quarter. Sales in 3M's safety and industrial sales fell nearly 5% to $2.81 billion for the quarter, and sales in its transportation and electronics business fell 6.2%.
Revenue declined in 3M's aerospace unit, which makes industrial glues and other products for plane makers. Boeing Co.'s decision to halt production of its 737 MAX has been working its way through the plane's vast supply chain.
3M reported that sales in China and Hong Kong grew 0.8%, even as the economy slows there.
As one of the largest makers of medical face masks, the company has ramped up production to meet a surge of demand due to the global outbreak of a coronavirus in China.
The outbreak gained momentum this month, so the impact to the company's fourth quarter, which ended in December, was limited.
The company said its job cuts would come from across its global businesses and will save the company up to $120 million a year. The company booked a $134 million restructuring charge in the fourth quarter related to the cuts.
3M last April said it was cutting 2,000 jobs in underperforming business lines, such as energy and electronics.
The reorganization places the oversight of international employees within each of the company's four global business groups, rather than having them report to an international operations division.
The company said sales in the latest quarter rose to $8.11 billion overall from $7.95 billion a year earlier due in part to the October completion of its $4.3 billion acquisition of wound-care company Acelity Inc.
Analysts had expected revenue of $8.11 billion in the quarter, according to FactSet. 3M reported a profit of $969 million compared with $1.35 billion a year ago. Adjusted earnings were $1.95 a share. Analysts polled by FactSet were expecting adjusted earnings of $2.11 a share.
For 2020, the company said it expects earnings between $9.30 and $9.75 a share. Analysts were expecting the company to earn $9.59 a share in 2020.
Write to Austen Hufford at austen.hufford@wsj.com
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January 28, 2020 at 09:39PM
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