3M Company

What they do

3M develops, manufactures and markets industrial, safety, electronics and consumer products sold in roughly 200 countries, with approximately 56% of 2025 revenue generated outside the United States. Its three reportable segments are Safety and Industrial (abrasives, tapes, electrical products, personal safety), Transportation and Electronics (advanced materials, automotive and aerospace, electronics materials, display films) and Consumer (home care, home improvement, stationery, consumer safety). Products range from Cubitron abrasives and VHB tape to Scotch-Brite, PELTOR headsets and 3M Expanded Beam Optics.

Revenue drivers

• Safety and Industrial — Largest segment, spanning abrasives, industrial adhesives and tapes, electrical markets, personal safety and roofing granules; 2025 growth was led by strength in safety and general industrial, partly offset by softness in auto aftermarket and roofing granules.
• Transportation and Electronics — Serves automotive, aerospace, semiconductor and data center customers with advanced materials, electronics assembly solutions, chip packaging materials and light management films; cited as a source of strength in semiconductors and data centers in Q2 2026.
• Consumer — Home and auto care, home improvement, packaging and expression, and consumer safety and well-being brands such as Scotch-Brite and retail abrasives; consumer was described as a source of softness in both 2025 and Q2 2026.

Recent performance

Q2 2026 GAAP sales were $6.5 billion, up 2.4% year-on-year, with adjusted organic sales up 5.4% and adjusted operating margin of 24.9% (GAAP margin 15.1%). GAAP EPS was $1.78, up 33%, while adjusted EPS was $2.40, up 11%. GAAP margin was pressured by special items including a $0.61 per-share loss on business divestitures and $0.15 per share of transformation costs, partly offset by a $0.60 benefit from the change in Solventum's share price. Q2 operating cash flow was $1.0 billion and adjusted free cash flow $1.3 billion, with $1.4 billion returned to shareholders. Full-year 2025 net sales were $24.95 billion, up 1.5% GAAP.

Strategy

3M is positioning itself as a higher-performing, more focused company after completing the Solventum spin-off in April 2024 and exiting PFAS manufacturing by the end of 2025. Recent announcements include a strategic partnership with Microsoft to advance AI data center infrastructure, with Microsoft the first announced hyperscale cloud provider deploying 3M Expanded Beam Optics; a long-term Airbus agreement for A220 cabin insulation; and a multi-year partnership as the Cadillac Formula 1 Team's Official Material Science Partner. The company launched Ask 3M, an AWS-powered AI customer assistant, and continues to invest in commercial excellence, innovation and productivity while managing transformation and litigation costs.

Risks

• Litigation and PFAS exposure — Net costs for significant litigation and the PFAS exit remain material, including the 2025 PFAS-related New Jersey settlement and ongoing treatment, remediation and disposition of pre-exit PFAS assets.
• Trade and tariff exposure — With roughly 56% of 2025 revenue outside the U.S., 3M is exposed to tariffs, retaliatory countermeasures and escalating U.S.-China trade tensions, which management cites as a margin headwind.
• Dis-synergies and segment changes — Cost dis-synergies from the PFAS manufacturing exit and the Solventum spin, plus 2026 changes to segment performance measures and composition, complicate margin comparisons.
• Demand softness in key markets — Management has flagged known softness in auto aftermarket, roofing granules, commercial vehicles and consumer/consumer electronics, including in the latest quarter.

Outlook

Management raised full-year 2026 adjusted EPS guidance from $8.50–$8.70 to $8.80–$8.95, citing strong first-half performance and momentum. It guides to adjusted total sales growth of 4.5% with adjusted organic growth of 3.5%, adjusted operating margin expansion of 70–80 basis points, and adjusted operating cash flow guidance. CEO William Brown said the company remains confident in creating long-term shareholder value through its strategic priorities.