3M Company
MMM · NYSE
Next quarter
Expected to report Jan 19, 2027 — estimated from last year’s reporting date.
Consensus is $2.03 EPS for Dec 2026 across 5 estimates, ranging $2.02 to $2.05.
MMM Sep 2026
- 4.17%
- $2.40
- $2.50
- —
- $6.58B
Reported results
- $6.58B
- 42.27%
- $1.56B
- 23.66%
- $1.37B
- $2.63
Highlights
- Adjusted EPS: $2.50 beat the $2.40 consensus by 4.17% and rose 12% year over year on 3M’s updated basis; GAAP diluted EPS was $2.63, up 70%.
- Organic growth: Adjusted sales increased 4.2% to $6.6 billion, including 3.3% organic growth; reported sales rose 1.0%, partly reflecting the comparison with exited manufactured PFAS products.
- Margin expansion: Adjusted operating margin reached 26.2%, up 110 basis points year over year; management cited 230 basis points of gross-margin improvement from productivity and execution.
- Segment divergence: Safety and Industrial organic sales grew 7.0%, while Transportation and Electronics grew 0.5% amid a mid-teens decline in consumer electronics; Consumer sales fell 0.2%.
- 2026 outlook: 3M raised adjusted EPS guidance to $9.10–$9.15 and reiterated adjusted organic sales growth above 3.5%; adjusted free cash flow is expected to be about $4.8 billion.
- Data-center push: 3M said EBO sales should be about $40 million in 2026 and $80–$100 million in 2027; an Amazon warrant can cover up to 3.2 million shares if specified milestones, including $6 billion in cumulative sales over seven years, are achieved.
- Cash and shareholder returns: Adjusted free cash flow was $1.2 billion despite $486 million of GAAP operating cash flow; 3M returned $600 million through $400 million of dividends and $200 million of repurchases.
- Innovation and execution: 3M launched 87 products in the quarter, up 24%, and reported nearly $3 billion of year-to-date sales from products launched in the prior five years, up 34% year over year.
Analysis
3M delivered a clear operating improvement in Q3, with adjusted EPS of $2.50 above the $2.40 consensus by 4.17% and up 12% year over year. Adjusted sales rose 4.2% to $6.6 billion, including 3.3% organic growth, while reported sales grew 1.0%. Adjusted operating margin expanded 110 basis points to 26.2%. On a GAAP basis, diluted EPS was $2.63 versus $1.55 a year ago, and revenue of $6.58 billion compared with $6.52 billion. Sequentially, revenue increased from $6.50 billion in Q2 and adjusted EPS from $2.44 on the recast basis; GAAP EPS rose from $1.78.
The print was defined by stronger industrial and safety demand, productivity-led margin gains, and continued weakness in consumer electronics. Safety and Industrial grew 7.0% organically, more than offsetting softer results in other areas. Management also highlighted high-single-digit order growth and backlog up high teens year over year, supporting its outlook for Q4 organic growth above 4%. 3M raised its full-year adjusted EPS range to $9.10–$9.15, while keeping adjusted free cash flow guidance at about $4.8 billion. Cash conversion in the quarter was affected by litigation and PFAS-related payments: GAAP operating cash flow was $486 million, versus adjusted free cash flow of $1.2 billion.
Earnings and margins
- Adjusted results: Adjusted operating income was $1.73 billion, up from $1.59 billion a year earlier, and adjusted margin increased to 26.2% from 25.1%. The updated non-GAAP basis treats acquired-intangible amortization as a special item; 3M said this adds about 40 basis points to the Q3 margin and $0.04 to adjusted EPS, with comparisons recast consistently.
- GAAP results: Operating income rose to $1.56 billion from $1.45 billion, while net income attributable to 3M shareholders increased to $1.37 billion from $834 million. GAAP EPS growth also reflected below-the-line items, including the change in value of 3M’s retained Solventum ownership.
- Drivers: Management attributed $260 million of the $140 million year-over-year increase in operating profit to sales growth and productivity, offset by about $120 million of stranded costs and investments. Gross margin improved 230 basis points, with cost of poor quality down 40 basis points.
Organic growth mix
- Safety and Industrial: Organic sales grew 7.0%, led by industrial and safety products, commercial initiatives, and new-product ramps. Segment operating income increased to $960 million from $792 million.
- Transportation and Electronics: Organic sales grew 0.5%. Consumer electronics was down mid-teens, while the business outside consumer electronics grew about 5%, including strength in semiconductors, data centers, aerospace, and commercial branding.
- Consumer: Organic sales declined 0.2%, improving sequentially. U.S. point-of-sale growth exceeded 2%, but retailer inventory reductions weighed on sell-in; management expected the segment to turn slightly positive in Q4.
- Orders and regions: Orders grew high single digits and backlog was up high teens year over year. Management cited approximately 7% growth in the U.S. and Canada and weakness in China, where demand was pressured by consumer electronics.
Data-center opportunity
The quarter brought a significant commercial and supply-chain step for 3M’s Expanded Beam Optics (EBO) effort. Under an expanded relationship, Amazon may purchase up to 3.2 million 3M shares through a warrant tied to milestones, including $6 billion of cumulative optical-connectivity and other data-center product sales over seven years. Management stressed that the arrangement is not a volume commitment: 3M must earn the sales, with a ramp expected late in 2027 and greater contribution in 2028. EBO revenue is expected to be roughly $40 million in 2026 and $80–$100 million in 2027. 3M has more than doubled internal capacity to over 10 million ferrules annually and will work with GSEO, in which it acquired a 4.7% stake, to expand manufacturing and diversify supply. Separately, total data-center sales are expected to reach about $700 million in 2026, versus approximately $550 million in 2025.
Guidance and productivity
- Raised EPS outlook: 3M lifted 2026 adjusted EPS guidance to $9.10–$9.15 from the prior $8.95–$9.10 range on the updated basis, implying 11%–12% annual growth.
- Sales and cash outlook: The company expects adjusted total sales growth above 4.5%, including adjusted organic growth above 3.5%, and adjusted operating cash flow of about $5.9 billion with adjusted free cash flow of about $4.8 billion.
- Costs and pricing: 3M now estimates $185 million of 2026 oil-cost inflation, up from its prior $150–$175 million estimate, and expects pricing to offset it. The company expects an approximately 24.6% adjusted operating margin for 2026.
- Transformation and launches: Management said productivity and supply-chain actions are supporting margin expansion, with 16 manufacturing and distribution sites closed year to date and 10 more actions planned over the next 12 months. It launched 87 products in Q3, up 24%, and said five-year new-product sales were nearly $3 billion year to date, up 34%.
Cash and PFAS
- Cash conversion: GAAP operating cash flow was $486 million, down from $1.76 billion a year ago. Adjusted net operating cash flow was $1.45 billion and adjusted free cash flow was $1.20 billion, compared with $1.31 billion of adjusted free cash flow last year; management attributed the gap to litigation and PFAS payments and working-capital timing.
- Legal cash costs: The release’s reconciliation adds back $894 million of after-tax litigation and PFAS-exit payment impacts to Q3 operating cash flow. The filing reported approximately $1 billion of net pre-tax cash payments for significant litigation and PFAS exit during the quarter.
- Litigation status and returns: The AFFF MDL had approximately 15,250 cases as of October 1; the court adopted recommendations to dismiss most claims covered by the initial vetting motions, and settlement discussions on personal-injury claims continued with a court-appointed mediator. 3M returned $600 million to shareholders in Q3 and $4.4 billion in the first nine months.
