3M (NYSE: MMM) raised its full-year profit forecast on October 20 after third-quarter adjusted earnings climbed 12 percent to $2.50 per share. Cost controls, price increases, and steady demand for safety products drove the beat, and management lifted its 2026 outlook above the range it gave investors in July.
What happened in the third quarter
The St. Paul, Minnesota industrial company reported GAAP sales of $6.6 billion, up 1.0 percent year over year, with GAAP earnings of $2.63 per share, up 70 percent. Adjusted for special items, earnings of $2.50 per share rose from $2.23 a year earlier and came in ahead of analyst estimates near $2.38.
Organic sales grew 3.3 percent. Adjusted operating margin expanded 110 basis points to 26.2 percent, and the company produced $1.2 billion of adjusted free cash flow for the quarter.
| Third-quarter measure | Result |
|---|---|
| GAAP sales | $6.6 billion, up 1.0 percent |
| Adjusted organic sales growth | 3.3 percent |
| GAAP EPS | $2.63, up 70 percent |
| Adjusted EPS | $2.50, up 12 percent |
| Adjusted operating margin | 26.2 percent, up 110 basis points |
| Adjusted free cash flow | $1.2 billion for the quarter |
The guidance raise
3M now expects full-year adjusted earnings of $9.10 to $9.15 per share, up from the $8.80 to $8.95 range issued in July. The company also guided to adjusted total sales growth above 4.5 percent, organic growth above 3.5 percent, and roughly $4.8 billion of adjusted free cash flow.
Chief Executive William Brown pointed to sales growth, margin expansion, and double-digit earnings growth as evidence the turnaround plan is holding.
| Full-year 2026 outlook | July guidance | October guidance |
|---|---|---|
| Adjusted EPS per share | $8.80 to $8.95 | $9.10 to $9.15 |
| Adjusted free cash flow | About $4.8 billion | About $4.8 billion |
| Adjusted total sales growth | Not stated in July | Above 4.5 percent |
What is driving the results
The Safety and Industrial segment led with 7 percent organic growth, and the company’s backlog grew 18 percent year over year. Sales in the United States and Canada rose about 7 percent, the strongest pace since the pandemic, while China sales fell by high single digits.
New products did some of the lifting. 3M launched 87 products in the quarter, up 24 percent, and counts about $700 million of data-center-related revenue for 2026, up from $550 million last year. The company also granted Amazon a warrant for up to 3.2 million shares tied to hitting $6 billion in cumulative data-center sales over seven years.
What it means for income investors
3M returned $600 million to shareholders in the quarter, including $400 million in dividends and $200 million in buybacks. Year to date, the total stands at $4.4 billion, with $1.2 billion of dividends and $3.2 billion of repurchases.
Rising free cash flow is the number that matters for the payout. Guidance near $4.8 billion for the year gives the dividend substantial coverage on top of what the buyback already returns.
Risks to watch
- Litigation and PFAS-related costs, which ran $0.19 per share in the quarter.
- Oil-driven input inflation, now seen as a $185 million headwind for the year.
- China demand, still down by high single digits.
- The Solventum stake, whose value swing subtracted $0.60 from GAAP earnings.
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