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MMM · Q2 2026
Archived report (Q2 2026). Latest deep dive →
The quarter in brief
Noisy GAAP over a cleaner core — adjusted operating margin rose 40 bp to 24.9% on solid industrial demand, while the headline swings (operating income −14%, EPS +33%) are mostly PFAS-exit divestiture losses and litigation-cost timing, not the underlying business.
Net Income
$938M
up 29% y/y
Net Sales
$6,500M
up 2.5% y/y
Operating Income
$984M
down 13.7% y/y
All figures in $M.
| Line item | Amount and change |
|---|---|
| Safety & Industrial | $3,091 · +8% |
| Transportation & Electronics | $2,066 · +6% |
| Consumer | $1,247 · -2% |
| Corporate (PFAS wind-down) | $96 · −64.8% |
| Net Sales | $6,500 · +2.5% · Organic +3.3% |
| Cost of Sales | $3,817 · +4.7% |
| SG&A | $1,061 · -16% · Litigation specials fading |
| R&D | $302 · +5% |
| Loss on Divestitures* | $336 · vs $3 · PFAS exit |
| Operating Income | $984 · -13.7% · 15.1% margin · adjusted 24.9% |
| Other Income, net | $136 · vs −$217 |
| Pretax Income | $1,120 · +21% |
| Income Taxes | $183 · ETR 16.3% (was 26.5%) |
| Net Income | $938 · +29% |
| Noncontrolling Interests | $5 |
| Net Income to 3M | $933 · +29% · Diluted EPS $1.78 · +33% |
Verdict: noisy GAAP over a cleaner core — adjusted operating margin rose 40 bp to 24.9% on solid industrial demand, while the headline swings (operating income −14%, EPS +33%) are mostly PFAS-exit divestiture losses and litigation-cost timing, not the underlying business.
Organic sales +3.3% (segments: divestitures −0.4 pp, FX +1.8 pp) · adjusted EPS guidance reaffirmed with 70–80 bp of margin expansion · diluted shares 522.4M (−3.4% y/y on buybacks).
Source and notation
* marks non-cash / ≈ estimated. Source: 3M press release, 8-K EX-99.1 (SEC EDGAR).
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- The GAAP swings are one-offs in both directions: a $336M loss on business divestitures (PFAS exit) crushed operating income (−13.7%), while 'other expense' swung to $136M of INCOME from a $217M expense a year ago (litigation-related items) — pretax income rose 21% as a result.
- The core is healthier than GAAP shows: adjusted operating margin 24.9% (+40 bp y/y); litigation and PFAS-exit special items cost $183M this quarter vs $347M a year ago.
- SG&A fell 16% to $1,061M — last year's quarter carried heavy litigation special charges; R&D grew 5%.
- Segments diverge: Safety & Industrial operating income +16% to $859M (personal safety, electrical, adhesives all growing), Transportation & Electronics +5%, but Consumer fell 6% on weak home improvement and packaging demand.
- Corporate revenue collapsed to $96M from $273M — the wind-down of manufactured PFAS products; that drag makes total sales (+2.5%) look slower than segment sales (+4.7%).
- EPS grew faster than net income (+33% vs +29%) on a 3.4% smaller share count; the effective tax rate fell to 16.3% from 26.5%.
- Prior-year net income included $47M from unconsolidated subsidiaries (mostly gone this year, $1M) — another y/y comparison quirk.
What distorts the picture in this report and what to watch beyond the headlines.
MMM — 3M Company develops a wide range of industrial, consumer, healthcare, and safety products, known for innovations like Post-it and Scotch tape.
Based in Minnesota, USA, it operates in numerous countries worldwide.
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