3M shares surge on raised outlook as turnaround gains traction
Adjusted earnings of $2.40 per share and new partnerships with Microsoft, Airbus, and NASA signal progress in multiyear restructuring.
Shares in industrial conglomerate 3M rose more than 6% in premarket trading on Tuesday after the company reported second-quarter earnings that exceeded Wall Street expectations and upgraded its full-year guidance. The results underscore the early traction of a multiyear turnaround strategy initiated in 2024, which aims to stabilise the business following years of operational and regulatory headwinds.
For the quarter ended June, 3M reported adjusted earnings of $2.40 per share, surpassing the consensus estimate of $2.25. Adjusted operating margins improved to 24.9%, reflecting tighter cost controls and improved execution. Looking ahead, the company raised its full-year adjusted earnings guidance for 2026 to a range of $8.80 to $8.95 per share, up from its previous forecast of up to $8.70 and ahead of analyst expectations of $8.74.
The financial improvement is part of a broader strategic shift away from its traditional consumer product identity towards a focus on high-growth industrial and technological sectors. While historically known for items such as Post-it Notes and Scotch Tape, 3M is increasingly positioning itself as a critical materials technology supplier for electronics, advanced manufacturing, aerospace, and artificial intelligence infrastructure.
Evidence of this pivot was highlighted through several key commercial engagements announced alongside the earnings release. Microsoft became the first hyperscaler to deploy 3M’s Expanded Beam Optics technology for AI data centres, addressing the growing demand for efficient data transmission. Additionally, 3M secured a long-term agreement with Airbus to supply advanced insulation technologies for the A220 aircraft, while its communication headsets were utilised by crew members on NASA’s Artemis II mission.
The turnaround follows a period of significant challenges for the company, including liabilities associated with PFAS, often referred to as 'forever chemicals', and the completion of its 2024 spin-off of the healthcare business, which was rebranded as Solventum. By shedding non-core assets and focusing on its materials science capabilities, 3M is attempting to reset its growth trajectory and mitigate legacy risks.
