10-QPeriod: Q2 FY2026

3M CO Quarterly Report for Q2 Ended Jun 30, 2026

Filed July 21, 2026For Securities:MMM

Summary

3M Company reported solid revenue growth for the second quarter and first six months of 2026, with net sales increasing by 2.4% and 1.9% year-over-year, respectively. This growth was primarily driven by strength in the Safety and Industrial, and Transportation and Electronics segments, fueled by innovation and commercial excellence, particularly in areas like industrial, safety, semiconductor, and data center markets. Despite topline growth, the company's profitability was impacted by 'special items,' including significant litigation costs and PFAS exit expenses, which affected GAAP operating margins and EPS. Adjusted for these items, the company demonstrated improved operating income margins and EPS growth, reflecting underlying operational strengths and productivity gains. Significant strategic moves included the acquisition of Madison Fire & Rescue and the ongoing management of divestitures and transformation programs. The company also provided updates on its substantial legal and environmental liabilities, notably the PFAS litigation and settlement payments, which continue to be a material factor in its financial disclosures.

Key Highlights

  • 1Net sales increased by 2.4% to $6.5 billion in Q2 2026 and by 1.9% to $12.53 billion in the first six months of 2026, year-over-year.
  • 2The Safety and Industrial segment showed robust growth with an 8.2% increase in sales for Q2 2026, driven by strong performance in electrical markets, abrasives, and personal safety.
  • 3The Transportation and Electronics segment also saw a 6.2% sales increase in Q2 2026, benefiting from demand in semiconductor, aerospace, and data center markets.
  • 4GAAP operating income margin decreased by 2.9 percentage points in Q2 2026 due to special items, but adjusted operating income margin improved by 0.4 percentage points.
  • 5GAAP EPS was $1.78 in Q2 2026, a 33% increase year-over-year, while adjusted EPS was $2.40, an 11% increase.
  • 6The company completed the acquisition of Madison Fire & Rescue for $1.95 billion in July 2026, partnering with Bain Capital.
  • 7Total liabilities remained significant at $31.9 billion, with substantial accruals for PFAS-related environmental matters ($7.4 billion) and the Combat Arms Earplugs settlement ($1.9 billion) as of June 30, 2026.

Frequently Asked Questions

3M's sales growth in the second quarter of 2026 was primarily driven by strength in its Safety and Industrial segment (up 8.2%) and Transportation and Electronics segment (up 6.2%). Key contributing factors included progress in commercial excellence and innovation, particularly in electrical markets, abrasives, personal safety, semiconductor, aerospace, and data center markets. Organic sales growth was 2.3% for the quarter.

Special items, which include net costs for significant litigation (PFAS, respirator mask/asbestos, Combat Arms Earplugs), business divestitures, and transformation costs, have a significant impact on 3M's GAAP financial results. These items caused a decrease in GAAP operating income margin in Q2 2026. 3M provides 'adjusted' non-GAAP measures that exclude these special items to offer investors a view of underlying operational performance. For Q2 2026, adjusted operating income margin improved, and adjusted EPS showed growth, highlighting the operational improvements apart from these extraordinary charges.

3M continues to manage substantial liabilities related to PFAS litigation and settlements. The company recorded $7.4 billion in 'other environmental liabilities' related to PFAS matters as of June 30, 2026. Additionally, the Combat Arms Earplugs Settlement has resulted in accrued liabilities of $1.9 billion as of the same date, with payments scheduled through 2029. The company is actively engaged in resolving these matters through settlements, litigation, and insurance recovery efforts, but they represent a material ongoing financial commitment.

3M maintains a strong liquidity profile with $3.3 billion in cash, cash equivalents, and marketable securities as of June 30, 2026. The company has access to a $4.25 billion revolving credit facility and a new $1.43 billion term loan facility. Despite significant payments for litigation settlements and investments in strategic acquisitions like Madison Fire & Rescue, the company's operating cash flow, strong balance sheet, and access to capital markets provide financial flexibility. The company continues to prioritize investing in its business, returning cash to shareholders via dividends and share repurchases, and managing its portfolio.