3M Co. MMM 0.10% said rising N95 mask sales helped deliver higher-than-expected revenue in the materials company’s most recent quarter, as the Omicron variant drove U.S. confirmed Covid-19 infections to record levels.
The St. Paul, Minn.-based manufacturer said new federal guidance around masks has helped drive additional sales of 3M’s N95 disposable respirators, and executives said 3M also might benefit from a government program to distribute 400 million American-made N95 masks free of charge.
“People recognize the protection they get with an N95,” said 3M Chief Executive Mike Roman. “Government officials have been public about that. It has heightened people’s awareness.”
3M is the biggest U.S. respirator manufacturer, and struggled to meet a surge in demand in the early days of the pandemic as government guidance on wearing masks shifted and many workplaces and state and federal agencies issued mask requirements. The U.S. and the world faced a shortage of medical-grade face masks for much of 2020, and 3M and other companies responded by boosting production in and outside the U.S.
The Centers for Disease Control and Prevention said in updated guidance this month that to prevent the spread of the more highly transmissible Omicron variant, people should consider wearing N95 masks—which are effective at trapping small particles—and other face coverings that are more protective than cloth masks.
For the quarter ended Dec. 31, 3M said it logged an additional $40 million in mask sales above its expectations set before the Omicron variant began to spread.
A Biden administration program to hand out N95 masks free of charge at pharmacies and health centers should also support demand, the company said. The masks are sourced from the Strategic National Stockpile, and that would likely translate to additional orders if the stockpile gets replenished, Mr. Roman said.
An N95 mask test in 2020 at a Minnesota lab run by 3M.
Photo: nicholas pfosi/Reuters
Even with the recent increase in mask demand, 3M expects overall demand to fall as the year progresses. The company said mask sales fell 25% in the fourth quarter compared with the same quarter in 2020, though not as sharply as expected.
3M’s mask sales peaked in the first quarter of 2021. The company said it had $1.5 billion in N95 and other mask sales in 2021, compared with $1.4 billion in 2020 and $600 million in 2019, before the pandemic.
Companywide sales for the fourth quarter of 2021 increased 0.3% to $8.61 billion. Earnings per share declined 10 cents to $2.31, as 3M said lower production volumes for some products made them more expensive to produce. Shares in 3M were down 0.3% in afternoon trading.
Write to Austen Hufford at [email protected]
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This post first appeared on wsj.com
