Shares of 3M Co. plummeted toward its biggest one-day decline in over 30 years, after the industrial, health-care and consumer products company reported missed profit and revenue expectations, slashed its full-year outlook, and said it was cutting 2,000 jobs…. The percentage decline was second only to the 26% plunge on Oct. 19, 1987. That is the day referred to as Black Monday, with the Dow registered its biggest-ever one-day crash with a 22.6% tumble.
3M stock took its worst cliff-dive in thirty years today because its revenue plummeted this past quarter. Its stock had been on the rise all year as part and parcel of the recent market-wide rally, showing just how quickly things can turn bad, and how little those bidding up a stock often know about the current business of the company they are buying. It did not fall due to rising costs or bad management, but due to falling sales in almost everything.
3M’s worst declines came in its manufacturing for industry and for electronics and energy where revenue was down 6.6% and 11.9% respectively. Now, I know 3M makes a lot of tape, and the government buys a lot of red tape, but I don’t think you can blame this plunge on the government shutdown either, as has been popular in the undeserved euphoria of this earnings season. The business simply wasn’t there to be had.
When you think about what 3M makes you realize it may be a harbinger of the recession I have been predicting for this year, and its graph of what happened today may foreshadow what the stock market looks like soon, too.
Read the rest here: The Great Recession