3M Reports Second-Quarter 2025 Results, Increases Full-Year EPS Guidance

Rhea-AI Summary

3M (NYSE: MMM) reported strong Q2 2025 results with GAAP sales of $6.3 billion, up 1.4% year-over-year, and adjusted EPS of $2.16, increasing 12%. The company's adjusted operating margin improved to 24.5%, up 290 basis points year-over-year.

Key highlights include adjusted organic sales growth of 1.5%, $1.3 billion returned to shareholders through dividends and share repurchases, and adjusted free cash flow of $1.3 billion. Operating cash flow was negative $1.0 billion due to $2.2 billion in litigation-related payments.

3M raised its full-year 2025 guidance, now expecting adjusted EPS of $7.75-$8.00 (up from $7.60-$7.90) and adjusted total sales growth of approximately 2.5%, including the impact of tariffs.

Positive

• Adjusted EPS increased 12% year-over-year to $2.16
• Adjusted operating margin improved significantly by 290 basis points to 24.5%
• Full-year EPS guidance raised to $7.75-$8.00
• Returned $1.3 billion to shareholders via dividends and share repurchases
• Generated strong adjusted free cash flow of $1.3 billion

Negative

• GAAP operating margin declined 230 basis points to 18.0%
• GAAP EPS decreased 38% to $1.34
• Negative operating cash flow of $1.0 billion due to litigation payments
• Significant litigation costs of $2.2 billion impacting cash flow
• Modest organic sales growth of only 1.5% despite positive outlook

Insights

Financial Analyst

3M posted solid Q2 with 1.5% organic growth and 12% adjusted EPS growth, raising full-year guidance despite tariff headwinds.

3M delivered a strong second quarter with several notable achievements. The company posted $6.2 billion in adjusted sales, representing 1.5% organic growth year-over-year. More impressive was the adjusted operating margin of 24.5%, expanding a substantial 290 basis points compared to last year.

The adjusted EPS of $2.16 increased 12% year-over-year, demonstrating effective cost management and operational efficiency. This performance follows a consistent pattern, with all three business groups growing organically for the third consecutive quarter, showcasing broader strength across the company's portfolio.

The divergence between GAAP and adjusted figures is significant. GAAP EPS declined 38% to $1.34, primarily due to litigation costs and other special items. The $1.0 billion negative operating cash flow stems from $2.2 billion in after-tax payments for litigation settlements, mainly related to Public Water Systems and Combat Arms Earplugs cases. When adjusted for these special items, free cash flow was a healthy $1.3 billion.

Most encouraging for investors is the raised full-year guidance, with adjusted EPS now expected between $7.75 and $8.00, up from the previous $7.60-$7.90 range. This increase is particularly noteworthy as it factors in expected tariff impacts, suggesting management has confidence in their operational execution and growth trajectory despite these headwinds.

The company continues to return substantial capital to shareholders, with $1.3 billion distributed through dividends and share repurchases in Q2 alone. The implementation of the 3M eXcellence operating model appears to be gaining traction, serving as the foundation for improved operational discipline.

• GAAP sales of $6.3 billion, up 1.4%; operating margin 18.0%, down (230) bps; EPS of $1.34, down 38%, all YoY
  • Adjusted sales of $6.2 billion with organic growth of 1.5% YoY
  • Adjusted operating margin of 24.5%, up 290 bps YoY
  • Adjusted EPS of $2.16, up 12% YoY
• Operating cash flow of $(1.0) billion with adjusted free cash flow of $1.3 billion
• 2025 adjusted EPS guidance increased from $7.60 - $7.90 to $7.75 - $8.00, including the impact of tariffs

ST. PAUL, Minn., July 18, 2025 /PRNewswire/ -- 3M (NYSE: MMM) today reported second-quarter 2025 results.

"We delivered strong results in the second quarter, posting positive organic sales growth and double-digit EPS growth," said William Brown, 3M Chairman and CEO. "This continues our trend from Q1 with all three business groups growing organically for the third quarter in a row. Our 3M eXcellence operating model is the foundation for delivering on each of our strategic priorities, and it drives the operating rigor and rhythm of our performance culture. With execution improving and solid results in the first half, we have confidence in our increased full-year EPS guidance, which now embeds the expected impact of tariffs."

Second-quarter highlights:

				Q2 2025		Q2 2024
		GAAP EPS from continuing operations (GAAP EPS)		$          1.34		$          2.17
		Special items:
		Net costs for significant litigation		0.79		0.44
		(Increase) decrease in value of Solventum ownership		0.01		(2.00)
		Pension risk transfer charge		—		1.09
		Manufactured PFAS products		0.02		—
		Divestiture costs		—		0.23
		Adjusted EPS from continuing operations (adjusted EPS)		$          2.16		$          1.93
		Memo:
		GAAP operating income margin		18.0 %		20.3 %
		Adjusted operating income margin		24.5 %		21.6 %

• GAAP EPS of $1.34 and operating margin of 18.0%.
• Adjusted EPS of $2.16, up 12% year-on-year.
• Adjusted operating income margin of 24.5%, an increase of 2.9 percentage points year-on-year.

				GAAP		Adjusted (non-GAAP)
		Net sales (billions)		$6.3		$6.2
		Sales change
		Total sales		1.4 %		2.3 %
		Components of sales change:
		Organic sales		0.6		1.5
		Acquisitions/divestitures		—		—
		Translation		0.8		0.8
		Adjusted sales excludes manufactured PFAS products.

• Sales of $6.3 billion, up 1.4% year-on-year with organic sales up 0.6% year-on-year.
• Adjusted sales of $6.2 billion, up 2.3% year-on-year with adjusted organic sales up 1.5% year-on-year.
• 3M returned $1.3 billion to shareholders via dividends and share repurchases.
• Cash from operations of $(1.0) billion, driven by $2.2 billion net after tax payments for special item costs of significant litigation, primarily Public Water Systems and Combat Arms Earplugs.
• Adjusted free cash flow of $1.3 billion.

This document includes reference to certain non-GAAP measures. See the "Supplemental Financial Information Non-GAAP Measures" section for applicable information.

Updated full-year guidance

3M updated its full year 2025 guidance given the company's performance in the first half of the year. The updated guidance includes the impact from tariffs.

• Adjusted total sales growth¹ in the range of ~2.5 percent, reflecting adjusted organic sales growth¹ of ~2.0 percent.
• Adjusted EPS¹ in the range of $7.75 to $8.00.
• Adjusted operating cash flow¹ of $5.1 to $5.5 billion, contributing to >100 percent adjusted free cash flow conversion¹.

¹As further discussed at ⁴ within the "Supplemental Financial Information Non-GAAP Measures" sections, 3M cannot, without unreasonable effort, forecast certain items required to develop meaningful comparable GAAP financial measures and, therefore, does not provide them on a forward-looking basis reflecting these items.

Conference call

3M will conduct an investor teleconference at 9 a.m. ET (8 a.m. CT) today. Investors can access this conference via the following:

• Live webcast at https://investors.3M.com
• Webcast replay at https://investors.3m.com/financials/quarterly-earnings

Consolidated financial statements and supplemental financial information non-GAAP measures

View the Financial Statement Information on 3M's website: https://investors.3m.com/financials/quarterly-earnings

Forward-looking statements

This document contains forward-looking statements. You can identify these statements by the use of words such as "plan," "expect," "aim," "believe," "project," "target," "anticipate," "intend," "estimate," "will," "should," "could," "would," "forecast," "future," "outlook," "guidance" and other words and terms of similar meaning. Forward-looking statements are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic, political, regulatory, international trade, geopolitical, capital markets and other external conditions and other factors beyond the Company's control, including inflation; recession; military conflicts; trade restrictions such as sanctions, tariffs, reciprocal and retaliatory tariffs, and other tariff-related measures; regulatory requirements, legal actions, or enforcement; and natural and other disasters or climate change affecting the operations of the Company or its customers and suppliers; (2) foreign currency exchange rates and fluctuations in those rates; (3) liabilities and the outcome of contingencies related to certain fluorochemicals; known as "PFAS," including liabilities related to claims, lawsuits, and government regulatory proceedings concerning various PFAS-related products and chemistries, as well as risks related to the Company's plans to exit PFAS manufacturing and work to discontinue use of PFAS across its product portfolio; (4) risks related to the class-action settlement ("PWS Settlement") to resolve claims by public water suppliers in the United States regarding PFAS, as well as risks related to other settlements related to PFAS; (5) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the Company's reports on Form 10-K, 10-Q, and 8-K (Reports), as well as compliance risks related to legal or regulatory requirements, government contract requirements, policies and practices, or other matters that require or encourage the Company or its customers, suppliers, vendors, or channel partners to conduct business in a certain way; (6) competitive conditions and customer preferences; (7) the timing and market acceptance of new product and service offerings; (8) the availability and cost of purchased components, compounds, raw materials and energy due to shortages, increased demand and wages, tariffs, supply chain interruptions, or natural or other disasters; (9) unanticipated problems or delays when implementing new business systems and solutions, including with the phased implementation of a global enterprise resource planning (ERP) system, or security breaches and other disruptions to the Company's information or operational technology infrastructure; (10) the impact of acquisitions, strategic alliances, divestitures, and other strategic events resulting from portfolio management actions and other evolving business strategies; (11) operational execution, including the extent to which the Company can realize the benefits of planned productivity improvements, as well as the impact of organizational restructuring activities; (12) financial market risks that may affect the Company's funding obligations under defined benefit pension and postretirement plans; (13) the Company's credit ratings and its cost of capital; (14) tax-related external conditions, including changes in tax rates, laws or regulations; (15) matters relating to the spin-off of the Company's Health Care business, including the risk that the expected benefits will not be realized; the risk that the costs or dis-synergies will exceed the anticipated amounts; potential impacts on the Company's relationships with its customers, suppliers, employees, regulators and other counterparties; the ability to realize the desired tax treatment; risks under the agreements and obligations entered into in connection with the spin-off; and (16) matters relating to Combat Arms Earplugs ("CAE") and related products, including those related to, the August 2023 settlement that is intended to resolve, to the fullest extent possible, all litigation and alleged claims involving the CAE sold or manufactured by the Company's subsidiary Aearo Technologies and certain of its affiliates ("Aearo Entities") and/or the Company ("CAE Settlement"). A further description of these factors is located in the Reports under "Cautionary Note Concerning Factors That May Affect Future Results" and "Risk Factors" in Part I, Items 1 and 1A (Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly Reports). Changes in such assumptions or factors could produce significantly different results. The Company assumes no obligation to update any forward-looking statements discussed herein as a result of new information or future events or developments.

About 3M
3M (NYSE: MMM) is focused on transforming industries around the world by applying science and creating innovative, customer-focused solutions. Our multi-disciplinary team is working to solve tough customer problems by leveraging diverse technology platforms, differentiated capabilities, global footprint, and operational excellence. Discover how 3M is shaping the future at 3M.com/news.

Please note that the company announces material financial, business and operational information using the 3M investor relations website, SEC filings, press releases, public conference calls and webcasts. The company also uses the 3M News Center and social media to communicate with our customers and the public about the company, products and services and other matters. It is possible that the information 3M posts on the News Center and social media could be deemed to be material information. Therefore, the company encourages investors, the media and others interested in 3M to review the information posted on 3M's News Center and the social media channels such as @3M or @3MNews.

Contacts
3M
Investor Contacts:
Diane Farrow, 612-202-2449
or
Eric Herron, 651-233-0043
Media Contact:
3MNews@mmm.com

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/3m-reports-second-quarter-2025-results-increases-full-year-eps-guidance-302508615.html

SOURCE 3M Company

FAQ

What were 3M's (MMM) Q2 2025 earnings results?

3M reported GAAP EPS of $1.34 (down 38%) and adjusted EPS of $2.16 (up 12%). Sales reached $6.3 billion, up 1.4% year-over-year, with adjusted organic growth of 1.5%.

What is 3M's updated earnings guidance for 2025?

3M raised its full-year 2025 adjusted EPS guidance to $7.75-$8.00 (from previous $7.60-$7.90) and expects adjusted total sales growth of approximately 2.5%.

How much did 3M pay in litigation settlements during Q2 2025?

3M made $2.2 billion in net after-tax payments for special item costs of significant litigation, primarily related to Public Water Systems and Combat Arms Earplugs.

What was 3M's operating margin in Q2 2025?

3M's GAAP operating margin was 18.0% (down 230 bps), while adjusted operating margin improved to 24.5% (up 290 bps year-over-year).

How much cash did 3M return to shareholders in Q2 2025?

3M returned $1.3 billion to shareholders through a combination of dividends and share repurchases during Q2 2025.