3M's Problems Run Deeper Than the Economy

Another set of earnings and another disappointment for investors in 3M (NYSE: MMM) -- and its management can, once again, be accused of being too optimistic with guidance. While the deteriorating economic environment obviously played a part, as it did with many industrial companies in the current earnings season, there are stock-specific questions to be answered here, too. And until there's evidence to suggest they are dealt with, in this author's view, 3M deserves to trade at a valuation discount to its peers. Let's look at another weak quarter for the company.

Another car crash of an earnings report from 3M. Image source: Getty Images.

The company's recent history of meeting its stated guidance can only be described as patchy at best. Management gave its guidance for full-year 2019 organic local currency growth of 2% to 4% during its outlook meeting presentation in November 2018, but it didn't look realistic even back then and as you can see below, management spent most of 2019 cutting that sales and earnings guidance.

Source Fool.com