By Rachit Vats
(Reuters) – Industrial conglomerate 3M Co’s quarterly profit surpassed expectations on Tuesday, boosted by higher demand for its N95 respirator masks during the ongoing coronavirus pandemic, sending its shares up as much as 6%.
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 healthcare and consumer.
“We believe Q2 results will be especially challenged given the trends we have seen so far in April,” CEO Michael Roman said on a post-earnings 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 $1.3 billion compared to its prior estimate of $1.6 billion to $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% to $8.08 billion beating market expectations of $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% 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%, while Asia-Pacific sales fell 5.4%, and Europe, Middle East and Africa reported declines of 2.1%.
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 $1.29 billion, or $2.22 per share, in the quarter ended March 31, from $891 million, or $1.51 per share, a year earlier.
On an adjusted basis it earned $2.16 per share, beating expectations of $2.03 per share.
(Reporting by Rachit Vats in Bengaluru; Editing by Supriya Kurane)