Reported EPS of $2.63 was inflated by a non-operating gain on the Solventum stake 8-K. Company-defined adjusted EPS rose 12% to $2.50, and GAAP organic sales grew only 0.2% against 3.3% excluding exited PFAS products 8-K.
3M Company · Q3 2026 · Reported 20 Oct 2026 · US
Key figures
Million USD | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
Net sales | 6,584.00 | 6,517.00 | +1.0 % |
Operating income | 1,558.00 | 1,447.00 | +7.7 % |
Net income | 1,373.00 | 834.00 | +64.6 % |
Diluted EPS | 2.63 USD/share | 1.55 USD/share | +69.7 % |
Adjusted EPS | 2.50 USD/share | 2.23 USD/share | +12.1 % |
Adjusted operating income margin | 26.2 % | 25.1 % | +1.1 pp |
GAAP operating income margin | 23.7 % | 22.2 % | +1.5 pp |
Operating margin | 23.7 % | 22.2 % | +1.5 pp |
Net margin | 20.9 % | 12.8 % | +8.1 pp |
Figures in USD, as reported. Margins are computed from the reported lines. Changes in ratios are in percentage points.
Most of the 70% EPS jump came below operating income
GAAP diluted EPS was $2.63 against $1.55 a year earlier, and net income rose 64.6% to $1.37 billion 8-K. Operating income rose a more modest 7.7% to $1,558 million (the year-earlier base included a $161 million loss on business divestitures), with GAAP operating margin at 23.7% against 22.2% 8-K. The gap sits in other income: net other income of $112 million against net expense of $300 million a year earlier 8-K. The release shows the change in value of the Solventum stake adding $0.60 per share, against a $0.13 reduction a year earlier 8-K. A lower diluted share count (522.6 million against 538.1 million) also helped EPS 8-K.
On the company-defined adjusted basis, EPS rose 12% to $2.50 from $2.23 and adjusted operating margin reached 26.2%, up 110 bps from 25.1% a year earlier 8-K. This follows a change in non-GAAP treatment that excludes intangible amortization for all periods, which the company says does not materially affect year-on-year comparisons 8-K.
Underlying sales growth depends on stripping out exited PFAS products
GAAP sales rose 1.0% to $6,584 million, with organic growth of 0.2% 8-K. Excluding manufactured PFAS products, which 3M exited, the company-defined adjusted organic growth was 3.3% and total adjusted growth 4.2% 8-K. The adjustment reflects the exit, not a demand reading.
The growth was concentrated. Safety and Industrial grew organic sales 7.0%, and acquisitions added another 3.1 points, while Transportation and Electronics grew 0.5% and Consumer fell 0.2% 8-K. China organic sales fell 10.7% as reported, or 7.3% on the adjusted basis 8-K.
Operating cash flow fell sharply on litigation payments, and the cash message rests on adjusted measures
Operating cash flow was $486 million against $1,756 million a year earlier 8-K. The release adds back $967 million of special-item payments, including $894 million of after-tax litigation and PFAS exit payments, to reach adjusted operating cash flow of $1,453 million, and adjusted free cash flow of $1,197 million against $1,310 million a year earlier 8-K. Management's "robust free cash flow" therefore refers to the adjusted figure, which fell year on year 8-K. The release gives no working-capital detail for the quarter.
What to watch next
Whether litigation and PFAS exit payments, $1 billion pre-tax in Q3, fit the guided 2026 operating cash flow of $5.9 billion and adjusted free cash flow of $4.8 billion 8-K.
Whether organic growth outside Safety and Industrial improves, given the 0.5% and (0.2)% in Transportation and Electronics and Consumer, against guided adjusted organic growth of 3.5% for the year 8-K.
Sources
Produced by Clarifo Research with the Clarifo financial research engine from the company's public filings. AI was used in parts of the analysis and drafting. Figures are checked automatically against the filings they come from. This is not investment advice.