ii view: 3M growth assisted by AI and acquisition
Underperforming the Dow Jones index year-to-date, it has paid a dividend every year for more than 100 years. We assess prospects.
20th October 2026 16:16
by Keith Bowman from interactive investor
Third-quarter results to 30 September
- Revenues up 4.2% to $6.6 billion
- Adjusted earnings up 12% to $2.50 per share
- Returned $0.6 billion to shareholders via dividends and share buybacks, down from $1.4 billion in Q2
Guidance:
- Now expects full-year adjusted earnings of $9.10 to $9.15, up from a previous $8.80-8.95 per share
Chief executive William Brown said: “We delivered another quarter of strong results, including solid sales growth, continued margin expansion, double-digit earnings per share (EPS) growth, and robust free cash flow.
“Improving productivity through structural transformation and a stronger pipeline of differentiated technologies reinforce our confidence in the full-year outlook and long-term growth and margin potential.”
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ii round-up:
Industrial conglomerate 3M Co (NYSE:MMM) today raised full-year profit hopes as factors including exposure to data-centre growth and new bolt-on acquisitions play their part.
Third-quarter revenues to late September rose 4.2% to $6.6 billion (£5 billion), aiding a 12% gain in adjusted earnings to $2.50 per share. A deal to supply Amazon with required data-centre optical devices sat alongside the purchase of firefighting equipment supplier Madison Fire & Rescue.
Shares in the Dow Jones company rose 4% in US trading having come into these latest results little changed year-to-date. Shares for fellow data-0centre optical equipment maker Halma (LSE:HLMA) are down 7% so far in 2026. The Dow index itself has gained 8%.
3M’s many products range from automotive parts and building materials to electronic components and office supplies.
Other recent news included a deal to supply materials to golf club maker Ping, as well as winning an order for hearing protection solutions required by the US military.
A previously announced quarterly dividend payment of $0.78 per share was unchanged from the prior quarter.
The Minnesota-headquartered company’s performance improvement initiatives include simplifying and reshaping the business portfolio as well as enhancing business resilience and predictability.
ii view:
Started in 1902, 3M today employs around 60,000 people. Safety and Industrial made most profits during its last financial year at 54%. That was followed by Transportation and Electronics at 27%, with Consumer related goods the balance of 19%.
Geographically, the US accounted for most sales over the last financial year at 44%, followed by the combined Europe, Middle East and Africa at 17%, Asia Pacific 17%, China and Hong Kong 12%, and the Americas the balance of 10%.
For investors, war-induced higher energy prices pressuring inflation could yet see further interest rate rises, dampening economic growth and broad demand going forward. A share price to estimated net asset value comfortably above the three-year average may suggest the shares are not obviously cheap. Trade spats between the US and others continue, while more than half of all sales going overseas leave it vulnerable to currency moves.
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More favourably, exposure to growth areas such as data centres is aiding performance. Growth-enhancing acquisitions continue to be made, with management’s performance-enhancement initiatives continuing. Diversity in both products and geographical regions regularly mean one area experiencing difficulty is compensated by another generating growth, while the uninterrupted payment of a dividend for more than 100 years leaves the shares sat on an estimated future income yield of close to 2%.
For now, and despite ongoing risks, this diverse US industrial continues to justify its place in many already diversified investor portfolios.
Positives:
- Diversity of product
- Ongoing performance improvement plan
Negatives:
- Uncertain economic outlook
- Exposure to currency moves
The average rating of stock market analysts:
Strong hold
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