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3M (NYSE:MMM) +3.1% pre-market Friday, poised to open at its highest since September 2021, after posting better than expected Q2 adjusted earnings and revenues while raising its full-year outlook, as cost-cutting measures and efforts to focus on high-margin products begin to pay off.
Q2 profit fell to $723M, or $1.34/share, from $1.15B, or $2.07/share, in the year-earlier quarter, but adjusted earnings of $2.16/share exceeded $1.93/share reported a year ago and topped Wall Street consensus of $2.01/share, and adjusted operating margin, a key metric for the company, was 24.5%, ahead of estimates of 23.6%.
3M (NYSE:MMM) hiked its FY 2025 guidance for adjusted EPS to $7.75-$8.00 from its prior outlook of $7.60-$7.90, with the new guidance including additional costs from tariffs, and said is the result of improving execution and solid results in this year’s H1.
The company also sees full-year total sales growth of ~2.5%, reflecting adjusted organic sales growth of ~2%, and adjusted operating cash flow of $5.1B-$5.5B, contributing to greater than 100% adjusted free cash flow conversion.
Under CEO William Brown, 3M (NYSE:MMM) has taken steps to ease the impact of tariffs, including shifting production and pricing changes, but the company previously said tariffs could have a negative impact of as much as $0.40/share on full-year earnings.