A slowing global economy is hitting 3M just like many other big American multinational firms. But the Post-it note and Scotch tape maker suggested the company may be starting to right the ship.
3M said overall sales fell 2.6% in the second quarter while earnings per share plunged 37.5% because of weakness in Europe, Latin America and Asia.
3M’s stock rose Thursday morning before pulling back slightly in the afternoon along with the broader market. Results, while not great, still topped Wall Street’s even gloomier forecasts. The company also reaffirmed its previous outlook for 2019.
“I am encouraged by our company’s progress and performance in the second quarter,” said 3M chairman and CEO Mike Roman in a statement. “Our execution was strong in the face of continued slow growth conditions in key end markets, as we effectively managed costs.”
Shares of 3M have fallen 7% this year, making it the second-worst performer in the Dow. Only drugstore chain Walgreens Boots Alliance has fared worse, plummeting nearly 20% so far in 2019.
3M first warned last October that trade tension with China would be a problem.
In April, the stock tumbled in its worst one-day drop in 30 years, after 3M said the combination of weakness in China and a strong US dollar was wreaking havoc on its revenue and profit. The company lowered its outlook at the time and also said it was cutting 2,000 jobs.
3M’s results come one day after another industrial company in the Dow, construction equipment giant Caterpillar, also noted that demand was down in China.
Caterpillar’s stock fell following its results Wednesday. That’s because Caterpillar also had some bad news to report from the United States — the company reported a slowdown in sales from its energy equipment business because of weak demand from companies drilling in the Permian Basin, a hot spot for shale oil and gas.