Key Moments
- 3M projected 2026 adjusted earnings of $8.50 to $8.70 per share, with the midpoint just below the $8.61 per-share consensus.
- Consumer segment sales in the fourth quarter declined 1.2% year on year, while other business segments registered growth.
- Fourth-quarter adjusted profit of $1.83 per share and adjusted revenue of $6.02 billion both came in slightly ahead of analyst expectations.
Guidance Misses Expectations, Shares Fall
Jan 20 (Reuters) – Shares of 3M Co (NYSE:MMM) dropped 4.7% in premarket trading on Tuesday after the company issued an annual adjusted earnings forecast that came in marginally below Wall Street projections.
The Saint Paul, Minnesota-based industrial conglomerate guided for 2026 adjusted earnings in a range of $8.50 to $8.70 per share. The midpoint of that range was one cent under the $8.61 per-share estimate based on data compiled by LSEG.
Consumer Segment Lags Amid Softer U.S. Demand
3M continued to face headwinds in its consumer-facing operations, which house products such as Scotch-tape and Post-it. The company cited ongoing weakness in U.S. demand, subdued retail conditions, and pressure on discretionary spending as key factors weighing on this division.
In the fourth quarter, sales in the consumer segment – which accounted for more than 20% of 3M’s 2024 revenue – declined 1.2% compared with the same period a year earlier. This contrasted with growth reported across the company’s other business segments.
The broader U.S. consumer environment also showed signs of strain, with the U.S. consumer sentiment index deteriorating in November and December. That shift pointed to a moderation in spending after strong activity in the third quarter, as concerns around employment and the economic outlook increased.
Cost Actions, Pricing and New Products Support Margins
Despite the demand challenges, 3M has been able to protect profitability through a combination of cost reductions, price increases and product innovation under CEO Bill Brown. These measures helped offset softer volumes in the face of what the company described as a prolonged inflationary environment.
In 2025, 3M introduced 284 new products, representing a 68% increase from the prior year.
Quarterly Earnings and Margin Performance
For the latest reported period, 3M delivered adjusted earnings of $1.83 per share, exceeding analysts’ expectations of $1.80 per share.
Operating profitability improved as well. The company reported a fourth-quarter operating margin of 23.4%, up from 21.4% in the same quarter a year earlier. Looking ahead, 3M is targeting an operating margin of 25% by the end of 2027.
| Metric | Latest Quarter | Year-Ago Quarter / Estimate |
|---|---|---|
| Adjusted earnings per share | $1.83 | $1.80 (analysts’ estimate) |
| Operating margin | 23.4% | 21.4% (year earlier) |
| Adjusted revenue | $6.02 billion | $6.01 billion (LSEG-compiled estimate) |
| Consumer segment Q4 sales change | -1.2% year on year | More than 20% of 2024 company revenue |
| 2026 adjusted EPS guidance | $8.50 – $8.70 | $8.61 (LSEG-compiled estimate midpoint comparison) |
Outlook and Strategic Positioning
CEO Bill Brown highlighted the company’s focus on innovation and execution in navigating the broader macroeconomic environment. “Our accelerated pace of innovation and commercial execution positions us to outperform the macro environment again in 2026,” said CEO Brown in a statement.
3M’s strategic initiatives, combined with its margin targets and product pipeline, frame the company’s roadmap as it works toward a 25% operating margin goal by the end of 2027.
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