3M just got hit with a trifecta of negative news. Here's why the stock is diving today.
- 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.
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.