3M beats expectations in Q1 and gains in pre-market session

Industrial conglomerate 3M has kicked off its first-quarter 2025 earnings season on a strong note, delivering results that surpassed market expectations. The adjusted earnings per share (EPS) from continuing operations reached $1.88, exceeding the analysts' consensus of $1.77. This represents a 10% increase year-on-year. Net sales came in at $5.8 billion, also beating market forecasts but falling short of the prior year's figure.

Performance across business segments was varied. The Safety & Industrial division reported organic sales growth of 2.5%, followed by Consumer at 0.3%. In contrast, the Transportation & Electronics segment experienced a 4% decline in organic sales. The adjusted operating margin expanded to 23.5%, marking a 2.2 percentage point improvement compared to the same period last year.

The company reaffirmed its full-year adjusted EPS guidance range of $7.60–$7.90, aligning closely with the market consensus of $7.74. However, 3M cautioned that potential tariff impacts could reduce this year's earnings by $0.20–$0.40 per share, introducing an element of uncertainty related to the macroeconomic environment and trade policies. The company projects organic sales growth for 2025 to be in the range of 2–3%.

In terms of cash flow, 3M generated $0.5 billion in free cash flow during the first quarter and returned $1.7 billion to shareholders through dividends and share repurchases.

Market response to 3M's results has been positive, with pre-market trading indicating a near 2% rise in the company's share price. While not a high-growth stock, the solid performance amidst current uncertainties, coupled with robust guidance, appears sufficient to reassure investors.

The company's shares are expected to rebound from a key technical support level during today's trading session, although the stock has experienced a roughly 20% correction since its February peak. Source: xStation5