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- From litigation to job cuts, 3M announced a slew of bad news Tuesday.
- After Boeing halted 737 Max production, aerospace suppliers are struggling this quarter, The Wall Street Journal reported.
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Bad news came all at once for jack-of-all-trades conglomerate 3M Co. Tuesday.
The company’s stock plummeted as the firm contends with a trifecta of negative events: A hit to revenue last quarter, a federal subpoena, and continued exposure to Boeing’s 737 debacle as a parts-maker for the aerospace giant.
Shares fell as much as 6.02% Tuesday, after already sliding in early trading.
3M’s revenue fell by 2.6% after excluding currency moves and M&A activity, the company reported Tuesday before the market opened. To reduce expenses moving forward, 3M plans to cut its workforce by 1,500 jobs, which it says could save the company as much as $120 million.
Revenue in 3M’s aerospace unit, which makes parts for airplanes, fell by just over 8%. Boeing Co. has stopped production of its 737 Max, a demand-reducing move that has had ripple effects on its suppliers, The Wall Street Journal reported.
Arconic, a Boeing supplier, also reported lower-than-expected earnings on Monday, and said it may cut jobs in the coming year in order to make up for the $400 million it will lose of Boeing demand. The company was trading up by as much as 2.93% Tuesday.
To add to bad news, 3M’s CEO Mike Roman told analysts the company got a subpoena from federal courts looking into possible breaches of compliance with regulations surrounding PFAS chemicals, which are hazardous, at a company facility. The firm set aside $214 million in pre-tax charges to pay for litigation related to the matter, it said in a Tuesday release.
One potential bright spot for the company’s sales is a story that has otherwise roiled markets in recent days: coronavirus. 3M is a leading producer of medical face masks, The Wall Street Journal reported, which have seen a spike in demand as the contagious virus spreads.