The slowdown extends well beyond appliances. Manufacturers of insulation, flooring, siding, cabinets, roofing and other building materials have reported declining demand, according to industry data. Many companies say homeowners are postponing renovations or choosing smaller-scale repairs instead of full upgrades.

For appliance maker Whirlpool (WHR), there is a silver lining in today’s soft housing market: when a refrigerator or washing machine stops working, most households eventually replace it. The challenge is that these purchases tend to be practical rather than premium.

As a result, Whirlpool’s (WHR) more profitable product lines, which can account for up to 60% of unit sales in stronger markets, now represent less than 40% of volume.

Carrier Global (CARR), which produces heating and air-conditioning systems, said its net sales slipped 3% last year, in part because customers opted to repair existing equipment rather than replace it. Chief Executive David Gitlin told analysts that homeowners planning to sell are often hesitant to invest in major upgrades shortly before listing a property, preferring to patch things up and “get by” until a move.

Executives across the home-improvement and building-products landscape describe similar dynamics, but also point to potential green shoots.

Sherwin-Williams (SHW) CEO Heidi Petz said that when housing activity eventually picks up, suppliers will want to be positioned to benefit, though the market first needs renewed momentum. 3M (MMM) CEO Bill Brown noted that sluggish home sales are discouraging consumers from tackling large projects such as roof replacements.

Jeff Jackson, CEO of Cabinetworks, said interest from customers is improving, but orders have yet to follow in meaningful numbers.

Flooring manufacturer Mohawk Industries (MHK) highlighted the powerful impact of home turnover on spending. CEO Jeffrey Lorberbaum said buyers typically spend multiples more on remodeling flooring in the first year after purchasing a home than homeowners who stay put. Similarly, Williams-Sonoma (WSM) CEO Laura Alber said she is optimistic about 2026, noting that moves tend to trigger a wave of furnishing purchases.

At Whirlpool, CEO Marc Bitzer said a shift in consumer sentiment could lift discretionary purchases even before housing volumes fully rebound. Lennox International (LII) CFO Michael Quenzer added that existing-home sales appear to be stabilizing, which could provide incremental support.

Keith Hughes, an analyst at Truist Securities who covers building products and durable goods, said the remodeling downturn has been prolonged, rivaling the slump that followed the 2008-09 financial crisis. Even routine maintenance has been deferred, he said. Still, with the U.S. housing stock aging, he expects pent-up demand to eventually release. Once activity begins to recover, he said, the rebound could be significant, though it will require a catalyst to get started.

Some industry observers believe subtle consumer trends may hint at improving confidence. Meganne Wecker, CEO of Skyline Furniture Manufacturing, said retailers are beginning to request brighter fabrics and more distinctive designs after years dominated by neutral tones. In her experience, demand for bolder décor often signals a more upbeat outlook among buyers.

As housing turnover remains subdued, manufacturers are navigating a challenging stretch. But many are positioning themselves for what they believe could be a meaningful recovery once affordability pressures ease and consumer confidence returns, the Journal reported.

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The diversified industrial manufacturer ships roughly $700 million of products to Europe each year and imports about $250 million back into the U.S., according to Chairman and Chief Executive William Brown. Based on proposed tariff levels, Brown said the financial impact could become material. “If you just run the numbers at 10% and then expand up to 25%, you can get to something in the order of $60 to $70 million,” he said.

Shares of 3M (MMM) fell 8% to about $154.35 in midday trading on Tuesday.

The company said it expects revenue growth to accelerate in 2026 following a modest sales improvement in the fourth quarter, though its current outlook does not assume additional tariffs. Under the proposed policy, duties of 10% could be imposed early in the year and potentially rise to 25% by midyear. Brown said that scenario could translate into a $30 million to $40 million earnings impact in 2026.

3M (MMM) forecast adjusted sales growth of about 4% in 2026, up from $24.3 billion in 2025. The company projected adjusted earnings a share of $8.50 to $8.70, compared with $8.06 last year.

In the fourth quarter, net income fell to $577 million, or $1.07 a share, from $728 million, or $1.33 a share, a year earlier. Results were weighed down by litigation-related costs that reduced earnings by 56 cents a share. On an adjusted basis, earnings of $1.83 a share beat Wall Street expectations by three cents.

Quarterly revenue rose 2.1% to $6.1 billion, topping consensus estimates. However, margins emerged as a key concern.

Analyst Christopher Snyder of Morgan Stanley said margins were the primary downside surprise, citing a 360-basis-point sequential decline that exceeded typical seasonal patterns. He pointed to weakness in the consumer segment, where operating income came in 12% below expectations and margins slipped to 18%, a trend he said could pose near-term risk heading into the first quarter.

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Management View

• CEO William Brown highlighted “solid results in Q4, including organic growth of 2.2%, operating margin of 21.1%, earnings per share of $1.83 and free cash flow conversion of over 130%.” He stated, “We delivered significant margin expansion with a full year adjusted operating margin of 23.4%, up 200 basis points year-on-year,” and emphasized double-digit adjusted EPS growth to $8.06. Brown underscored the company’s progress on commercial excellence, innovation, and operational rigor, referencing “284 new products in 2025, up 68% versus 2024,” and a plan for 350 product launches in 2026. He noted that “sales from products launched in the last 5 years were up 23% in the full year, exceeding our high-teens target and exit Q4 at 44%.”
• Brown described operational achievements: “OTIF ended the year above 90%, 300 basis points above the prior year and the best we’ve achieved in decades,” and highlighted improvements in asset utilization and quality. He reaffirmed 3M’s capital allocation, reporting $4.8 billion returned to shareholders in 2025.
• The CEO signaled a shift to “the next phase of value creation,” including reengineering the cost base, simplifying business processes, and embedding an AI-first mentality. He stated, “Transformation also includes proactive steps on risk reduction and effectively managing the litigation docket.”
• CFO Anurag Maheshwari stated, “We had a strong finish to the year across all financial metrics,” and detailed “organic sales growth of 2.2% driven by our commercial excellence initiatives and new product launches.” He reported “adjusted operating margins were 21.1%, up 140 basis points and operating profit increased double digits or $125 million.” Maheshwari mentioned a $55 million charge for transformation investments, excluded from adjusted results, and highlighted $1.3 billion in adjusted free cash flow for the quarter.

Outlook

• Brown outlined expectations for 2026: “This year, we expect organic sales growth of approximately 3%, adjusted operating margin expansion of 70 to 80 basis points and earnings per share of $8.50 to $8.70 and free cash flow conversion greater than 100%.” He stated, “We expect most of our industrial businesses to continue to perform well in ’26 with watch items, including the pace and timing of a U.S. consumer recovery, auto build rates especially in geographies where we have higher content and consumer electronics.”
• Maheshwari projected, “We expect sales to accelerate for all business groups…SIBG and TEBG grew 2.7% combined in 2025, and we expect this growth rate will accelerate in 2026,” and noted, “We expect consumer to return to growth in 2026.”
• The company expects to expand margins by over $450 million or 100 basis points, offset by headwinds from “PFAS stranded costs and tariff impacts as well as an increase in growth and productivity investments to $225 million.”

Financial Results

• 3M reported organic sales growth of 2.2% in Q4 2025, supported by strength in safety, electronics, and general industrial, with ongoing softness in consumer, roofing granules, and auto markets.
• Adjusted operating margins reached 21.1% in Q4, up 140 basis points year-on-year, while adjusted EPS was $1.83, an increase of 9%.
• The company took a $55 million charge for transformation investments excluded from adjusted results.
• Safety and Industrial saw 3.8% organic sales growth in Q4, driven by safety and adhesives. Transportation and Electronics delivered 2.4% organic sales growth, led by electronics and aerospace, while Consumer sales declined 2.2% in Q4 and 0.3% for the full year.
• Full year 2025 results included organic sales growth of 2.1%, margin expansion of 200 basis points, and EPS increase of 10%.

Q&A

• Jeffrey Sprague, Vertical Research, asked about the pivot to priority verticals and portfolio composition. Brown responded, “It’s a little bit north of 60%, it’s growing, frankly, because of the investments we’re making…about 10% of our company would be in places that are more commodity like, and we’ll probably — we’ll think about what we want to do with those businesses over time.”
• Sprague inquired about the start of 2026. Brown said, “The exit rate was pretty solid actually, across the industrial businesses…even though IPI is coming down, our commercial excellence initiatives, our NPI initiatives, it’s going to allow us to continue to outperform that macro.”
• Scott Davis, Melius Research, asked about inventory levels. Brown explained, “On the industrial channel, it’s pretty normal…On the consumer side…inventory started to come down and normalize, still a little bit elevated as we exited the year.”
• Davis also questioned pricing strategy. Brown replied, “We expect it will be about 80 basis points more or less in 2026. A lot of it is SIBG.”
• Julian Mitchell, Barclays, sought clarification on earnings cadence and self-help versus macro impact. Maheshwari stated, “EPS will be equal between the first and second half,” and Brown added, “A lot of it was…carrying it on our shoulders and we expect to see more of that coming into 2026.”
• Joseph O’Dea, Wells Fargo, asked about footprint optimization. Brown noted, “We ended the year around about 108 factories…That will come down over time, I can’t size it for you today.”
• C. Stephen Tusa, JPMorgan, inquired about electronics growth and margin impact. Brown confirmed, “It’s mid-single digits…we’re not seeing it being margin dilutive as we innovate here.”
• Nicole DeBlase, Deutsche Bank, asked about China growth and tariffs. Brown said, “China actually had a very good year for us…we see that market to be more low to mid-single digits this year,” and indicated, “That is not yet in our guidance” regarding new potential European tariffs.

Sentiment Analysis

• Analysts maintained a neutral to slightly positive tone, focusing on execution, margin sustainability, and the pace of transformation. Inquiries addressed commercial excellence, portfolio shifts, and the impact of macro versus self-help.
• Management demonstrated confidence in both prepared remarks and Q&A, emphasizing operational achievements and future targets. Brown used phrases such as “we’re pretty confident” and highlighted continued outperformance and transformation progress.
• Compared to the previous quarter, management’s tone remained assured but placed greater emphasis on transformational changes and risk mitigation, while analysts continued to probe for clarity on execution and macro exposure.

Quarter-over-Quarter Comparison

• Guidance language for 2026 became more specific, with explicit targets for organic sales, margin expansion, and EPS, whereas the previous quarter only previewed frameworks and incremental updates.
• The strategic focus shifted more decisively toward transformation, with Brown discussing “reengineering the structural cost base” and an “AI-first mentality,” building on earlier references to foundational operational improvements.
• Both quarters highlighted commercial excellence and innovation as key growth drivers, but Q4 emphasized a stronger acceleration in new product launches and outperformance versus macro, with more detailed performance metrics and a larger number of product introductions.
• Analyst questions continued to focus on the balance of self-help versus macro, the durability of outperformance, and the trajectory of margin expansion, with recurring interest in portfolio management and segment-specific trends.

Risks and Concerns

• Management identified softness in consumer, roofing granules, and auto markets as ongoing challenges, as well as headwinds from PFAS stranded costs and tariffs.
• Brown noted, “We expect most of our industrial businesses to continue to perform well in ’26 with watch items, including the pace and timing of a U.S. consumer recovery, auto build rates…and consumer electronics.”
• The outlook acknowledged potential new European tariffs but specified, “That is not yet in our guidance.”
• Transformation-related costs and restructuring charges were recognized as necessary investments, with a $55 million charge in Q4.

Final Takeaway

3M management described 2025 as a pivotal year, delivering on commercial excellence, innovation, and operational rigor while laying out ambitious targets for 2026. The company projects organic sales growth of approximately 3%, operating margin expansion of 70 to 80 basis points, and EPS of $8.50 to $8.70. With a greater focus on transformational initiatives, portfolio optimization, and risk management, 3M aims to accelerate value creation and sustain profitable growth beyond 2027, reinforcing confidence in its strategic direction and execution capabilities.

Read the full Earnings Call Transcript

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The company said adjusted earnings this year will range from $8.50 to $8.70 a share, with the midpoint slightly below the $8.61 consensus estimate tracked by S&P Global. Adjusted revenue is expected to grow roughly 4%.

The guidance suggests momentum may be moderating for Chief Executive Officer Bill Brown’s overhaul of the company, which has focused on boosting efficiency across its industrial footprint and reinvigorating product development. Those initiatives helped 3M (MMM) exceed analyst forecasts several times in 2025.

For the fourth quarter, 3M (MMM) reported adjusted earnings of $1.83 a share, edging past the $1.80 analysts had projected. Adjusted operating margin came in at 21.1%, just under expectations of 21.3%.

Economic conditions remain the largest variable for the company’s results, according to Bloomberg Intelligence analyst Mustafa Okur, who said the outlook points to steady progress toward medium-term goals but little evidence of a sharper acceleration or major portfolio shifts.

As of about 7:30 a.m. in New York, 3M shares were down roughly 4% ahead of the market open. The stock had risen more than 20% over the past year, outperforming the S&P 500’s roughly 17% gain.

Push toward data centers and nuclear

Brown has been steering 3M (MMM) toward end markets with stronger cyclical growth. The company’s electrical segment has been targeting data center customers, including cables and related accessories, as global investment in AI-driven infrastructure expands. Data center-related activity represents about 3% of total revenue, according to Bank of America analyst Andrew Obin.

Separately, 3M (MMM) is positioning its nuclear-related operations, which support applications such as fuel control and isotope separation, to benefit from new reactor construction as power demand rises.

Brown has also explored strategic options for the conglomerate, including discussions with advisers about potential asset sales within its industrial businesses, Bloomberg reported in October, as part of a broader effort to move away from slower-growing segments.

In addition, the company has been increasing its use of digital tools, including the development of an AI-powered assistant aimed at cutting prototyping costs and accelerating product development.

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The company said adjusted earnings this year will range from $8.50 to $8.70 a share, with the midpoint slightly below the $8.61 consensus estimate tracked by S&P Global. Adjusted revenue is expected to grow roughly 4%.

The guidance suggests momentum may be moderating for Chief Executive Officer Bill Brown’s overhaul of the company, which has focused on boosting efficiency across its industrial footprint and reinvigorating product development. Those initiatives helped 3M (MMM) exceed analyst forecasts several times in 2025.

For the fourth quarter, 3M (MMM) reported adjusted earnings of $1.83 a share, edging past the $1.80 analysts had projected. Adjusted operating margin came in at 21.1%, just under expectations of 21.3%.

Economic conditions remain the largest variable for the company’s results, according to Bloomberg Intelligence analyst Mustafa Okur, who said the outlook points to steady progress toward medium-term goals but little evidence of a sharper acceleration or major portfolio shifts.

As of about 7:30 a.m. in New York, 3M shares were down roughly 4% ahead of the market open. The stock had risen more than 20% over the past year, outperforming the S&P 500’s roughly 17% gain.

Push toward data centers and nuclear

Brown has been steering 3M (MMM) toward end markets with stronger cyclical growth. The company’s electrical segment has been targeting data center customers, including cables and related accessories, as global investment in AI-driven infrastructure expands. Data center-related activity represents about 3% of total revenue, according to Bank of America analyst Andrew Obin.

Separately, 3M (MMM) is positioning its nuclear-related operations, which support applications such as fuel control and isotope separation, to benefit from new reactor construction as power demand rises.

Brown has also explored strategic options for the conglomerate, including discussions with advisers about potential asset sales within its industrial businesses, Bloomberg reported in October, as part of a broader effort to move away from slower-growing segments.

In addition, the company has been increasing its use of digital tools, including the development of an AI-powered assistant aimed at cutting prototyping costs and accelerating product development.

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More on 3M

• 3M: Sales And Profits Are On The Rise
• 3M: Operational Excellence And Turnaround Momentum Drive A Buy Rating
• New Management Has Definitely Shifted The Tone At 3M, But Follow-Through On Growth Is Essential
• 3M Non-GAAP EPS of $1.83 beats by $0.03, revenue of $6B misses by $10M
• Honeywell upgraded at J.P. Morgan on ‘disconnect’ to asset value; 3M downgraded

The post 3M in charts: Q4 Adj net sales from Transportation & Electronics, Consumer segments dip Y/Y appeared first on Up2info.com.

More on 3M

• 3M: Sales And Profits Are On The Rise
• 3M: Operational Excellence And Turnaround Momentum Drive A Buy Rating
• New Management Has Definitely Shifted The Tone At 3M, But Follow-Through On Growth Is Essential
• 3M Non-GAAP EPS of $1.83 beats by $0.03, revenue of $6B misses by $10M
• Honeywell upgraded at J.P. Morgan on ‘disconnect’ to asset value; 3M downgraded

The post Earnings Snapshot: 3M beats Q4 estimates; initiates FY 2026 financial guidance appeared first on Up2info.com.

The post 3M Non-GAAP EPS of $1.83 beats by $0.03, revenue of $6B misses by $10M appeared first on Up2info.com.

Honeywell’s (HON) “messy 2026 EPS profile, which will be cleared with guide, as creating an opportunity ahead of the looming break-up, on which we should get clarity on many key fronts in the next six months,” JPM analyst Stephen Tusa said.

Aerospace remains the key driver, as Honeywell (HON) expects all markets to grow by high single digits this year, but Tusa sees potential upside as industry participants expect another year of double-digit commercial OE and aftermarket growth, and optimism around the business jet demand environment likely will continue, where the company has outsized exposure in the super mid-size and above, which is the high value portion of the portfolio; additionally, rising geopolitical tensions and the prospect for FY 2027 budget growth have improved the outlook for defense.

Meanwhile, Tusa downgraded 3M (MMM) cut to Neutral from Overweight with a $182 PT, citing below-sector near-term earnings growth potential after having materially outperformed since new management came in, while applauding execution on cultural and operational improvements beyond expectations.

“While there is clearly momentum, we believe the early innings low-hanging fruit is behind in terms of the self help initiatives, solidly transitioning into the next phase which is reinvigorating the innovation engine, which we think will take time,” Tusa wrote.

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