3M (NYSE:MMM) posted fourth-quarter results today that matched the revenue consensus forecast on Wall Street but significantly missed on earnings — with the company announcing plans to cut 1,500 jobs amid a reorganization.
3M Healthcare Q4 sales were up 25.4% year-over-year.
The Maplewood, Minn.–based company reported profits of $969 million, or $1.66 per share, on sales of $8.1 billion for the three months ended Dec. 31, 2019, for a bottom-line loss of -28.1% and sales growth of 2.1% compared with Q4 2018.
Adjusted to exclude one-time items, earnings per share were $1.68, 42¢ behind The Street, where analysts were looking for sales of $8.1 billion.
“Our team executed well in the fourth quarter and delivered results that we in-line with our expectations,” chairman and CEO Mike Roman said in a news release. “While we continued to manage challenges in certain key end markets, we generated solid underlying margins and robust free cash flow.”
“We also continue to build for the future, including the launch of our new global operating model which represents the next phase of our transformation journey. As a result of our actions, we are well-positioned to improve our performance, return to growth and deliver a successful 2020,” Roman said.
3M said it would cut roughly 1,500 positions spanning all business groups, functions and geographies. The company is logging a pre-tax restructuring charge of $134 million during Q4 and expects annual pre-tax savings of $110 million to $120 million ($40 million to $50 million in 2020).
The company has laid off about 20 employees at recently acquired wound care giant Acelity.
The restructuring does away with the international operations organization in the company and has everyone around the world instead reporting into one of the company’s four business groups — Safety & Industrial, Transportation & Electronics, Health Care, and Consumer.
Shares in MMM were down -4.91% to $167 apiece in early morning trading.
Healthcare profits up
3M Healthcare reported an operating income of $2.1 billion, up 25.4% from Q4 2018, where reported sales were $1.7 billion.
Healthcare sales grew in food safety, health information systems, drug delivery and medical solutions, while sales were down in separation and purification and oral care, according to the company.
Updated with more details about restructuring.
Executive editor Chris Newmarker contributed to this story.