3M Co. (MMM - Get Report) posted weaker-than-expected first quarter earnings Thursday and said it will launch a restructuring plan, including 2,000 job cuts, that will re-align the company into four business units as it slashed 2019 profit forecasts.
3M said adjusted earnings for the three months ending in March came in at $2.23 per share, down 10.8% from the same period last year and well shy of the consensus forecast of $2.49. Group revenues, 3M said, fell 4.8% to $7.9 billion and again missed analysts' estimates of $8.02 billion as sales in China, as well as it automotive and electronics divisions, were "collectively down mid-single digits".
Looking into 2019, 3M said it sees earnings in the range of $9.25 to $9.75 per share, down from a prior forecast of $10.45 to $10.90 per share, and slashed its organic sales growth forecast to a range of -1% to +2% from a previous estimate of 1% to 4%.
"The first quarter was a disappointing start to the year for 3M," said CEO Mike Roman. "We continued to face slowing conditions in key end markets which impacted both organic growth and margins, and our operational execution also fell short of the expectations we have for ourselves.
"As a result, we have stepped up additional actions - including restructuring - to drive productivity, reduce costs, and increase cash flow as we manage through challenges in some of our end markets."
"While we take actions to manage through the near-term, we also continue to invest in growth to position 3M for the future," he added. "We recently implemented a significant portfolio realignment from five to four business groups, which will enable us to better serve our customers and global markets.
"Moving forward, I am confident that we are making the necessary changes and focused on the right priorities to accelerate 3M into a stronger future."
3M shares were marked 10.6% lower at the start of trading Thursday at $195.92 each, a move that would trim the stock's year-to-date advance to around 5%.
3M also said it set aside $235 million to cover potential costs related to PFAS-containing waste disposal lawsuits. A further $313 million was changed to cover "all current and expected future coal mine dust lawsuits in Kentucky and West Virginia", the company said.