Shares of 3M Co. (MMM) surged sharply after the Minnesota-based industrial conglomerate reported stronger-than-expected third-quarter results, driven by solid organic sales growth and significant margin expansion. The performance prompted management to raise its full-year profit guidance, signaling renewed recovery momentum amid ongoing global economic uncertainty.
Adjusted earnings per share (EPS) rose to US$2.19, up about 10% year-over-year, while organic sales grew 3.2%, marking the fourth consecutive quarter of positive growth. The adjusted operating margin expanded 170 basis points, supported by operational efficiency, supply chain improvements, and lower input costs.
“Our execution is becoming increasingly disciplined, supported by product innovation and improved factory efficiency,” said 3M CEO Bill Brown during the company’s earnings call. He added that 3M remains focused on three key priorities: enhancing sales and service performance, accelerating new product launches, and driving operational efficiency.
Upgraded 2025 Outlook
3M raised its full-year earnings guidance to US$7.95–8.05 per share, up from the previous range of US$7.75–8.00, reflecting confidence in its sustainable growth trajectory. The company also expects organic sales growth above 2% for full-year 2025, with free cash flow projected to reach US$1.3 billion and a conversion rate of 111%.
This upward revision reinforces investor confidence that the company’s ongoing efficiency and innovation strategies are beginning to yield tangible results — even as global macro conditions remain fragile.
Broadest Growth Since 2018
The Safety & Industrial Business Group (SIBG) led overall performance with 4.1% organic sales growth, its strongest since 2018 (excluding the pandemic period). The Electronics segment also recorded mid-single-digit gains, particularly in the Chinese market, while the automotive division remained relatively stable.
Geographically, sales rose nearly 4% in the US, grew in the high single digits in China, and returned to positive territory in Europe after several stagnant quarters.
Streamlining Portfolio and Operational Focus
3M continued its business simplification strategy by divesting the Precision Grinding & Finishing unit, which accounted for less than 1% of total revenue. The sale aligns with management’s effort to focus on higher-margin segments and strengthen supply chain efficiency.
Additionally, the company improved on-time delivery and overall equipment effectiveness (OEE) to reduce poor-quality costs. Over 70 new products were launched during the quarter — a 70% increase from last year — reflecting accelerated innovation across multiple divisions.
Risks Remain
Despite the robust Q3 performance, management remains cautious amid macro headwinds such as rising logistics costs, tariff pressures, and slowing demand in parts of the automotive and construction sectors. Fourth-quarter volumes are expected to soften seasonally, but on a year-over-year basis, 3M remains optimistic about outperforming global industrial growth.
Conclusion
3M’s Q3 results reinforce the narrative of a U.S. industrial recovery following years of inflationary pressure and supply chain disruption. With improving profitability, expanding margins, and a more focused portfolio strategy, the company appears to be on a firmer path heading into 2026.
3M shares closed up more than 7% on Tuesday, leading gains in the Dow Jones Industrial Average, as investors welcomed the company’s clearer restructuring direction and improving operational outlook.