TLDR
- 3M forecast 2026 adjusted profit of $8.50 to $8.70 per share, with the midpoint below Wall Street’s $8.61 estimate
- Shares dropped 4.7% in pre-market trading following the earnings announcement
- Fourth-quarter adjusted profit of $1.83 per share beat analyst expectations of $1.80 per share
- Consumer segment sales fell 1.2% year-over-year due to weak U.S. demand and discretionary spending pressures
- Company added 284 new products in 2025, representing a 68% increase from the previous year
3M reported fourth-quarter earnings on Tuesday that beat analyst estimates but provided guidance that disappointed investors. The company’s shares fell 4.7% in pre-market trading.
3M Company, MMM
The company forecast 2026 adjusted profit between $8.50 and $8.70 per share. The midpoint of $8.60 came in one cent below Wall Street’s estimate of $8.61 per share, according to LSEG data.
Despite the cautious outlook, 3M delivered a fourth-quarter adjusted profit of $1.83 per share. This beat analyst expectations of $1.80 per share.
Quarterly adjusted revenue reached $6.02 billion. The figure slightly exceeded LSEG-compiled estimates of $6.01 billion.
Weak Consumer Demand Weighs on Results
The company’s consumer segment faced headwinds during the quarter. Sales in this division, which includes Scotch-tape and Post-it products, fell 1.2% compared to the previous year.
This segment accounts for more than 20% of 3M’s 2024 revenue. Weak U.S. demand, soft retail markets, and discretionary spending pressures all contributed to the decline.
U.S. consumer sentiment deteriorated in November and December. Spending moderated after surging in the third quarter as concerns over jobs and economic conditions grew.
In contrast, 3M’s other business segments posted sales increases during the period.
Cost Cuts and Innovation Drive Margin Improvements
CEO Bill Brown has implemented cost reduction measures and price increases since taking the helm. These actions helped the company maintain margins despite challenging market conditions.
The company’s fourth-quarter operating margin reached 23.4%. This represents an improvement from 21.4% in the same period last year.
3M targets an operating margin of 25% by the end of 2027. The company appears on track to meet this goal based on current progress.
Innovation played a key role in 3M’s strategy during 2025. The company introduced 284 new products throughout the year, a 68% increase from the previous year.
“Our accelerated pace of innovation and commercial execution positions us to outperform the macro environment again in 2026,” CEO Brown said in a statement.
The Saint Paul, Minnesota-based company continues to focus on new product development and commercial execution as core strategies for growth.
The post 3M (MMM) Stock Falls Despite Beating Earnings: Here’s What Went Wrong appeared first on Blockonomi.
Source: https://blockonomi.com/3m-mmm-stock-falls-despite-beating-earnings-heres-what-went-wrong/