3M, the country’s biggest maker of N95 masks, said slower Covid-related demand will clip earnings and blunt sales growth this year.
Updated at 10:08 am EST
3M Co. (MMM) – Get 3M Company Report shares extended declines Monday, taking the stock of the industrial equipment maker back to the lowest levels in 18 months, after cautioning that mask sales will likely slow sharply this year and weigh on group profits.
In a presentation ahead of its annual investor day event, 3M said it sees organic sales growth of around 2% to 5% this year, with earnings in the region of $10.15 to $10.65 per share, as it commits around $4 billion to research and development and capital expenditures.
3M added that the expected decline in “Covid-related disposable respirator demand” would hit organic sales by 2 percentage points and take 45 cents from its overall bottom line.
Honeywell (HON) – Get Honeywell International Inc. Report, 3M’s main rival in the respirator business, said earlier this month that slowing mask sales would create a 1% headwind to organic sales growth, which it sees at between 5% and 8% this year.
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“3M is powered by purpose, unlocking the power of people, ideas, and science, to re-imagine what’s possible and create what’s next,” said CEO Mike Roman. “We are well positioned for 2022 and beyond because of our customer-inspired innovation, industry-leading businesses, fundamental strengths, and world-class capabilities enabling us to win in fast-growing markets.
3M shares were marked 2.4% lower in early Monday trading to change hands at $155.75 each, the lowest since late October of 2020.
N95 respirator sales, which accelerated during the Omicron wave that hit the U.S. late last year, helped the group post stronger-than-expected fourth quarter earnings of $2.31 per share on revenues of $8.61 billion in late January.
