What happened

Shares of 3M (NYSE:MMM) fell more than 5% in early trading Tuesday after the conglomerate reported fourth-quarter earnings that fell short of expectations and full-year sales that were down year over year. The company also announced plans to restructure, but investors are having a hard time getting excited about 3M's outlook.

So what

Before markets opened on Tuesday, 3M reported fourth-quarter adjusted earnings of $1.95 per share on revenue of $8.1 billion, falling short of the consensus estimate for $2.10 per share in earnings on sales of $8.12 billion. Sales at 3M's safety and transportation units fell, while consumer sales were flat and healthcare sales grew 25%, fueled by a large acquisition in the sector.

An arrangement of Post-It notes on a white board.

Sales at 3M's consumer goods segment, including its Post-it notes, were flat. Image source: Getty Images.

For the full year, the company reported sales of $32.1 billion, down 1.9% compared with 2018. A combination of acquisitions and divestitures increased sales by 1.3%, but that was offset by a 1.7% drop due to foreign currency conversion. 3M generated a full-year operating margin of 19.2%, down from 22% in 2018.

It also said it was moving to realign its businesses, which would result in the elimination of about 1,500 positions worldwide. The company said the restructuring, which led to a $134 million charge in the fourth quarter, will result in annual pre-tax savings of $110 million to $120 million when fully implemented.

CEO Mike Roman said that the results were in line with expectations, adding, "we are well positioned to improve our performance, return to growth, and deliver a successful 2020."

Now what

It was a year of transition for 3M, which surprised markets in April with worse-than-expected results and followed soon after with its largest-ever acquisition. Shares are down more than 23% since that April earnings announcement.

3M's focus right now is a shift away from cyclical industrial and transportation businesses in favor of becoming more of a steady-growth healthcare stock, but that transition is going to take time. Investors on Tuesday seemed content to watch the transformation play out from the sidelines.