3M Company (MMM) Earnings & Analysis

Latest quarter

3M’s Q3 FY2026 revenue of $6.6 billion missed the consensus, although both revenue and the estimate round to $6.6 billion. Adjusted earnings per share of $2.50 exceeded the consensus of $2.40. Revenue rose from $6.5 billion a year earlier, while diluted EPS increased to $2.63 from $1.55.

CFO Anurag Maheshwari said Safety and Industrial organic sales grew 7%, helped by commercial initiatives and new products. Transportation and Electronics sales rose 0.5%, with weaker consumer electronics offsetting growth elsewhere, while Consumer sales were flat.

3M’s operating margin rose to 23.7% from 22.2% a year earlier. The company’s filing attributed margin benefits to growth and productivity, partly offset by tariffs, investments and costs following its exit from PFAS manufacturing and the Solventum spin-off.

3M’s quarterly free cash flow was $230.0 million, compared with $1.6 billion a year earlier. On the call, Maheshwari separately described quarterly free cash flow of $1.2 billion and said working-capital timing had offset higher earnings.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Maheshwari said general industrial and safety demand supported organic growth, while semiconductor and data-center growth more than offset weaker consumer electronics. He said orders grew at a high-single-digit rate in the quarter and backlog rose by the high teens from a year earlier. In Consumer, he said U.S. point-of-sale growth was offset by inventory adjustments at several large retailers.

CEO Bill Brown said new products, service responsiveness and product availability helped 3M raise prices. He said pricing fully offset material and oil cost pressures. Maheshwari said productivity, especially in the supply chain, contributed to operating profit, while stranded costs and investments partly offset those gains.

Brown said 3M had closed 16 manufacturing sites and distribution centers year to date and was taking action on 10 more over the next 12 months. Asked about future margins, Maheshwari said supply-chain productivity and transformation should more than offset increased investments and stranded costs next year. Brown said factory consolidation would take several years to pay back.

On data centers, Brown said 3M had issued Amazon a warrant tied to $6 billion in cumulative sales of optical connectivity and other data-center products over seven years, as well as other milestones. He said 3M had also signed a manufacturing agreement with Genius Electronic Optical to help scale expanded beam optics production. Asked about the Amazon arrangement, Brown said it carried no volume commitments and that 3M would have to earn the business.

For the fourth quarter, Maheshwari pointed to backlog conversion and demand in aerospace, semiconductors and data centers. Brown said he expected Consumer to turn slightly positive. Asked about expanded beam optics revenue beyond next year, Brown said 3M was not sizing the opportunity beyond its roughly $80 million to $100 million expectation for next year.

Guidance

Maheshwari said 3M raised its FY2026 adjusted EPS guidance to $9.10 to $9.15 from $8.95 to $9.10 on the new reporting basis. He said 3M now excludes acquisition-related intangible amortization from adjusted results following the Madison acquisition.

Maheshwari also raised the estimated FY2026 oil inflation impact to $185 million from the $150 to $175 million range communicated in July, and said pricing actions were expected to offset the increase.