N95 respiration masks sit in a 3M lab in Maplewood, Minn., on March 4, 2020.Nicholas Pfosi/Reuters
Industrial conglomerate 3M Co.’s quarterly profit surpassed expectations on Tuesday, boosted by higher demand for its N95 respirator masks during the coronavirus pandemic, sending its shares up as much as 6 per cent.
3M is the world’s biggest maker of the masks and has seen demand swell as the outbreak spread globally, putting the company at the heart of a tug-of-war over supplies.
The worldwide lockdowns, however, are hammering other parts of its business, and it reported fall in revenue at its all units except health care and consumer.
“We believe Q2 results will be especially challenged given the trends we have seen so far in April,” chief executive Michael Roman said on a postearnings call.
The Minnesota-based company pulled its 2020 outlook citing economic uncertainty due to the pandemic and also suspended its share repurchase.
The company now expects 2020 capex to be about US$1.3-billion compared to its prior estimate of US$1.6-billion to US$1.8-billion.
Beginning May, 3M said it would begin reporting monthly sales information to provide transparency on its ongoing business performance as it navigates the pandemic.
N95 MASKS LIFT FIRST QUARTER
First-quarter sales rose 2.7 per cent to US$8.08-billion beating market expectations of US$7.91-billion, according to IBES data from Refinitiv.
In January the company said it was doubling its global output of N95 masks, designed to filter 95 per cent of airborne particles, to 1.1 billion annually.
Under White House pressure, 3M also reached an agreement this month to import 166.5 million N95 respirators to the United States from China and allow it to continue exporting its U.S.-made respirators.
U.S. sales rose 10.1 per cent, while Asia-Pacific sales fell 5.4 per cent, and Europe, Middle East and Africa reported declines of 2.1 per cent.
3M’s key market, China, reported a contraction in its economy for the first time on record as the coronavirus shut down factories and malls and put millions out of work.
Net income attributable to 3M rose to US$1.29-billion, or US$2.22 a share, in the quarter ended March 31, from US$891-million, or US$1.51 a share, a year earlier.
On an adjusted basis it earned US$2.16 a share, beating expectations of US$2.03 a share.
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