3M earnings increased in the third quarter of 2026 as operating margins widened, and the company raised its full-year adjusted earnings guidance to $9.10–$9.15 per share. Results released on October 20 showed adjusted earnings of $2.50 per share, up 12% from a year earlier, on adjusted sales of $6.6 billion.
Key Takeaways
- Adjusted organic sales grew 3.3%, while adjusted operating margin widened to 26.2%.
- A change in accounting treatment lifted adjusted earnings, but prior-year figures were restated on the same basis.
- The updated annual outlook incorporates year-to-date performance, the Madison Fire & Rescue acquisition and the accounting change.
Table of Contents
- 3M earnings grow faster than sales
- Accounting change affects adjusted comparisons
- Full-year outlook includes acquisition and reporting changes
- Data-center agreements expand the commercial pipeline
- Conclusion
3M earnings grow faster than sales
3M’s third-quarter results announcement showed GAAP sales rising 1.0% to $6.6 billion. GAAP earnings per share increased 70% to $2.63 from $1.55 a year earlier, while operating margin rose 150 basis points to 23.7%.
Adjusted sales also rounded to $6.6 billion but increased 4.2%, including organic growth of 3.3%. Those measures exclude manufactured PFAS products. On a GAAP basis, organic sales growth was 0.2%, making the distinction between the two sales measures important.
Adjusted operating margin increased 110 basis points to 26.2%, and adjusted EPS rose from $2.23 to $2.50. Earnings therefore grew faster than sales as the company retained more operating profit from each dollar of adjusted revenue.
Chairman and Chief Executive Officer William Brown attributed the performance to productivity improvements through structural transformation and a stronger pipeline of differentiated technologies.
| Item | Details |
|---|---|
| Third-quarter operating cash flow | $0.5 billion |
| Third-quarter adjusted free cash flow | $1.2 billion |
| Third-quarter shareholder returns | $0.6 billion through dividends and share repurchases |
| 2026 adjusted sales growth guidance | More than 4.5%, including adjusted organic growth of more than 3.5% |
| 2026 adjusted operating cash flow guidance | Approximately $5.9 billion |
| 2026 adjusted free cash flow guidance | Approximately $4.8 billion |
Accounting change affects adjusted comparisons
3M updated its non-GAAP reporting to treat intangible asset amortization as a special item for all periods presented. The company said the change increased third-quarter adjusted operating margin by approximately 40 basis points and adjusted EPS by approximately $0.04.
Because both current and prior-year figures use the revised treatment, 3M said year-over-year comparisons were not materially affected. The accounting change still matters when comparing the latest figures with numbers previously published on the old basis.
GAAP and adjusted earnings also reflect different treatment of other items, including changes in the value of 3M’s Solventum ownership, significant litigation and PFAS exit costs, transformation expenses and acquisition-related costs. The 70% rise in GAAP EPS should therefore be distinguished from the 12% increase in adjusted EPS.
Full-year outlook includes acquisition and reporting changes
The revised $9.10–$9.15 adjusted EPS forecast updates the guidance issued on July 21, 2026. It incorporates year-to-date performance, the acquisition of Madison Fire & Rescue and the new amortization treatment, rather than representing an operating-performance revision alone.
The company also provided the following cash-flow figures and annual growth targets. Its forward-looking adjusted measures are management guidance, not completed results.
Data-center agreements expand the commercial pipeline
Alongside the results, 3M highlighted an expanded strategic commercial relationship with Amazon to deploy and scale optical connectivity and other data-center products.
3M issued Amazon a warrant to purchase up to 3.2 million shares, subject to achieving $6 billion in cumulative sales of those products over seven years and other event-based milestones. That sales threshold is a condition tied to the warrant, not revenue already earned.
The company is also collaborating with Genius Electronic Optical on technology development and manufacturing for its Expanded Beam Optics solutions. In support of that work, 3M is investing to acquire approximately 4.7% of the optical technology company’s common shares.
Conclusion
The next reporting checkpoint is 3M’s full-year 2026 performance against its revised earnings, sales and cash-flow targets. Comparisons should retain the company’s distinction between GAAP results and adjusted figures on the new reporting basis.
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