3M lifts 2026 adjusted EPS guidance to $9.10-$9.15 as adjusted EPS climbs 12% from a year earlier

3M reported third-quarter net sales of $6.58 billion, up 1.0% from a year earlier, and adjusted earnings per share of $2.50, up 12%, then raised its full-year adjusted EPS guidance to $9.10 to $9.15. GAAP EPS was $2.63, lifted by a $0.60 gain on the company's retained Solventum ownership, while operating cash flow fell to $486 million from $1.76 billion on litigation payments.

A Solventum mark lifts reported profit above adjusted

3M's reported diluted EPS of $2.63 exceeded adjusted EPS of $2.50, and the bridge explains the inversion. Reported results included a $0.60 per-share gain from the change in value of 3M's retained Solventum ownership. That gain was removed to reach adjusted EPS, while $0.19 of net costs for significant litigation and the PFAS exit, $0.20 of amortization and business acquisition-related costs and $0.08 of transformation costs were added back. The $0.60 gain removed against $0.19, $0.20 and $0.08 of costs added back left a net $0.13 reduction from GAAP EPS of $2.63 to adjusted EPS of $2.50. The reported operating margin was 23.7%, up 150 basis points from 22.2%; the adjusted margin was 26.2%, up 110 basis points from 25.1%. 3M also changed its non-GAAP definition, treating acquired-intangible amortization as a special item in all periods. It said the change lifts the base-quarter adjusted margin by about 40 basis points and adjusted EPS by about $0.04, with no material effect on year-on-year comparisons.

Organic growth thins once PFAS sales leave the base

Net sales were $6.58 billion, up 1.0% from a year earlier, but reported organic sales rose only 0.2%. The adjusted presentation, which strips out manufactured PFAS products that 3M has exited, shows sales up 4.2% from a year earlier and organic sales up 3.3%; the PFAS removal accounts for 3.1 points of the organic difference. Safety and Industrial did the heavy lifting: segment sales rose 9.1% to $3.18 billion, with Fire Safety and Rescue jumping to $206 million from $108 million and acquisitions supplying part of the growth, according to the segment sales-change table. Transportation and Electronics was essentially flat at $2 billion and its operating income slipped to $468 million from $484 million. Consumer sales edged down to $1.31 billion. China remained the weak spot, with organic sales down by a double-digit percentage, while the United States and Canada grew 4.9% from a year earlier.

Litigation payments accounted for about 70% of the year-over-year decline in operating cash flow

Cash generation was the quarter's weakest line. Operating cash flow was $486 million, down from $1.76 billion, after $894 million of after-tax payments tied to significant litigation and the PFAS exit. Adjusted operating cash flow, which 3M uses to look through those payments, was $1.45 billion against $1.52 billion a year earlier, and adjusted free cash flow was $1.2 billion against $1.31 billion. For the first nine months, operating cash flow was $2.05 billion, up from $723 million, as the prior-year period absorbed larger settlement outflows. 3M returned $600 million to shareholders through dividends and buybacks in the quarter. The gap between reported and adjusted cash flow is the clearest evidence that legacy litigation still sets the pace of 3M's cash story, even as the operating businesses improve.

Guidance, the fourth quarter and the next dated disclosure

Guidance now puts 2026 adjusted EPS at $9.10 to $9.15, adjusted total sales growth above 4.5%, adjusted organic growth above 3.5%, an adjusted operating margin of about 24.6%, adjusted operating cash flow of about $5.9 billion and adjusted free cash flow of about $4.8 billion. Nine-month adjusted EPS was $7.11, so the range implies $1.99 to $2.04 for the fourth quarter. 3M described the update as incorporating year-to-date performance, the Madison Fire & Rescue acquisition and the amortization change, but the release does not restate the July 21 range, so the size of the increase cannot be computed from this document. The company also repeated that it cannot forecast certain special items without unreasonable effort, which is why it gives no GAAP EPS outlook.

“We delivered another quarter of strong results, including solid sales growth, continued margin expansion, double-digit EPS growth, and robust free cash flow,” Chief Executive William Brown said. The next dated disclosure is the investor teleconference at 9 a.m. ET today; the release does not set a date for fourth-quarter results.