3M Shares Up 2.5% After CEO Outlook
3M Company (NYSE:MMM) rose 2.5% on Wednesday following remarks by Chief Executive Officer Bill Brown at the Wells Fargo Industrials and Materials Conference. Brown reported that first‑quarter earnings per share increased 14% year‑over‑year and that operating margin expanded by 30 basis points. The company also delivered double‑digit growth in free cash flow and recorded organic revenue growth of just over 1% in the quarter, while orders surged double‑digit.
Looking ahead, Brown said 3M expects second‑quarter organic growth to be “solidly above 3%,” emphasizing that the firm is well into the period and that orders and backlog are converting to revenue. The backlog grew double‑digit both year‑over‑year and sequentially in the first quarter.
The momentum, according to Brown, stems from commercial‑excellence initiatives and innovation rather than pre‑buying ahead of the April price increases. Approximately 60% of the portfolio, including the general industrial and safety segments, posted mid‑single‑digit growth in the first quarter.
The data‑center business showed particular strength: the inside‑data‑center segment grew more than 50% each quarter. 3M’s optical‑fiber interconnect technology, branded EBO, received validation and an order from a major hyperscaler in the first quarter, with delivery scheduled for the second half of the year. The addressable market for optical connects inside data centers has expanded from over $1 billion at the end of the first quarter to north of $2 billion currently.
Brown noted that the company does not currently need to use the $0.05 to $0.15 contingency built into guidance for Middle‑East‑related impacts, as the Middle‑East business represents less than 2% of total revenue.
For the full year, 3M expects to achieve more than $300 million of growth above the macro environment, surpassing its target of $100 million for 2025. The firm is on track to deliver at least half of its $1 billion net‑productivity target by year‑end.
Finally, the Madison Fire & Rescue joint venture is slated to close on July 1, creating an approximately $800 million business in which 3M will hold a 51% stake. The transaction will return $700 million in cash to the parent company.