3M (NYSE:MMM) delivered a mixed bag of results for Q3 2026, meeting revenue expectations while exceeding profit forecasts. The industrial conglomerate reported sales of $6.58 billion, up 4.2% year on year, matching Wall Street's estimates. Its non-GAAP profit of $2.50 per share surpassed analyst expectations by 4.7%, marking a positive beat. Management also raised its full-year adjusted EPS guidance to $9.13 at the midpoint, a 2.8% increase.
The company's operating margin held steady at 23.7%, consistent with the same quarter last year. However, its free cash flow margin dropped significantly to 3.5%, down from 20.7% in the prior year. Organic revenue grew by 3.3% year on year, though this fell short of expectations. Despite these mixed results, 3M's market capitalization stands at $83.55 billion.
Looking ahead, sell-side analysts project revenue growth of 5.1% over the next 12 months, though this remains below the sector average. The company's long-term performance has been lackluster, with sales declining at a 6.6% annual rate over the past five years. However, its revenue growth of 3.4% over the last two years shows some improvement. The stock reacted positively to the earnings report, trading up 3.2% to $167.13 immediately following the results.
3M's ability to manage costs has been decent, with an average operating margin of 8.4% over the last five years. Yet, its profitability has declined by 2.8 percentage points during this period. While the company's EPS has remained flat over the last two years, it reported adjusted EPS of $2.50 in Q3, up from $2.19 in the same quarter last year. Wall Street expects 3M's full-year EPS to grow 8% from $8.87 to $9.58 over the next 12 months.