3M Reports Slowing October Sales Growth, Suggesting Sluggish Q4 Start

Healthcare continues to lead sales growth at 3M, but the pace of gains in most of the industrial group's division are running below trends seen over the third quarter.
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3M Co.  (MMM) - Get Report posted modestly slower-than-expected October sale growth figures Friday, suggesting a potentially sluggish start to the fourth quarter for the industrial group.

3M said October sales rose 3% from last year to $2.9 billion as healthcare revenues rose 12%, offsetting a 4% decline in transportation and electronics. Safety and industrial sales rose 4% while consumer sales were 7% higher, 3M said, compared to respective gains of 6% and 3% in August.

3M had forecast 'flat to low single digit' October sales growth during its third quarter earnings conference call with investors last month, but declined to provide profit or revenue guidance for the final three months of the year owning to broader economic and demand uncertainty linked to the coronavirus pandemic.

3M's total third quarter sales were pegged at $8.4 billion, up 4.5% from the same period in 2019, with year-on-year gains of 25.5% for healthcare, 7.4% for transportation and electronics, 6.9% for safety and industrial and 5.6% for consumer. 

"As we went through Q3 and got halfway through September, we did give you an estimate of how we were seeing sales," CEO Mike Roman said on October 27. "Behind that, still a lot of uncertainty about how this is going to play out, how the economy is going to impact the businesses we were just talking about. And that remains true today."

"The current environment remains uncertain, so we continue to keep our guidance withdrawn," he added. "We're going to focus on executing well against what we see coming, and we'll continue to report monthly sales. As soon as we get better visibility of the market outlook and the trends, then we will look at bringing back a view of guidance."

3M shares, a component of the Dow Jones Industrial Average, were marked 0.7% higher in early trading following the sales update, against a 0.6% gain for the Dow, to change hands at $168.20 each, a move that bumps their six-month gain to around 23%.