3M profit beats as strength in healthcare helps battle slowing China

(Reuters) - 3M Co's quarterly profit beat estimates on Thursday as the company's efforts to bolster its healthcare business helped it counter sluggish demand in its traditional industrial and transportation units due to a slowdown in China. Revenue fell at all but the diversified manufacturer's healthcare unit, where it rose about 6% on strength in both domestic and international markets. The company's healthcare unit sells everything from surgical tapes to sterilization products and accounted for about 22% of its total revenue in the quarter.

Reuters July 26, 2019 00:06:20 IST
3M profit beats as strength in healthcare helps battle slowing China

3M profit beats as strength in healthcare helps battle slowing China

(Reuters) - 3M Co's quarterly profit beat estimates on Thursday as the company's efforts to bolster its healthcare business helped it counter sluggish demand in its traditional industrial and transportation units due to a slowdown in China.

Revenue fell at all but the diversified manufacturer's healthcare unit, where it rose about 6% on strength in both domestic and international markets.

The company's healthcare unit sells everything from surgical tapes to sterilization products and accounted for about 22% of its total revenue in the quarter. 3M bought surgical wound-care company Acelity Inc in May to expand its medical dressings products.

The Post-It maker said the healthcare business is now expected to grow at the high end of its 2% to 4% forecast range.

"We talked about (healthcare) having a good quarter, and behind that is strong market growth," Chief Executive Officer Mike Roman said.

Total revenue fell 2.6% to $8.17 billion as the company continues to struggle with lower demand in the high-growth China automotive and electronics sectors. Sales in Asia-Pacific, 3M's biggest market outside the United States, fell 3.5%.

The company also booked a charge related to the restructuring of its Venezuela operations that pushed down profit by 39% to $1.13 billion, or $1.92 per share, in the second quarter ended June 30.

Excluding items, it earned $2.20 per share. Analysts were expecting $2.05 per share, according to IBES data from Refinitiv.

3M also reiterated its 2019 adjusted profit forecast to be between $9.25 to $9.75 per share.

3M's beat and reaffirmation of 2019 outlook were likely viewed positively by the market, after many analysts had called out 3M as a top short heading into the quarter, due to weakness in some of its key markets, Gordon Haskett analyst John Inch said.

Shares of the company erased earlier gains and were down 0.7% to $178 in afternoon trading. The broader Nasdaq index was also down about 1% at 12:57 pm ET.

(Reporting by Rachit Vats and Ankit Ajmera in Bengaluru; Editing by Arun Koyyur and Anil D'Silva)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.