3M Co (NYSE:MMM) raised its full-year earnings forecast after posting stronger-than-expected second-quarter results, driven by margin expansion and modest organic sales growth.
The diversified industrial giant reported adjusted earnings of $2.16 per share for the quarter ended June 30, beating analysts' average estimate of $2.01, according to LSEG data. That marked a 12% increase from the same period last year.
Revenue rose 1.4% to $6.3 billion, topping expectations of $6.1 billion, while organic sales grew 0.6% year over year.
The company's adjusted operating margin expanded by 290 basis points to 24.5%.
“We delivered strong results in the second quarter, posting positive organic sales growth and double-digit EPS growth,” CEO Mike Roman said in a statement. “With execution improving and solid results in the first half, we have confidence in our increased full-year EPS guidance, which now embeds the expected impact of tariffs.”
3M now expects full-year adjusted earnings of $7.75 to $8 per share, above its prior forecast and analysts’ consensus estimate of $7.67. The company also sees adjusted sales growth of about 2.5% and organic sales growth of around 2%.
Despite a negative operating cash flow of $1 billion in the quarter—largely due to $2.2 billion in legal payments—3M reported adjusted free cash flow of $1.3 billion and returned the same amount to shareholders through dividends and share buybacks.
Shares of the St Paul, Minnesota-based company rose about 3.3% in premarket trading following the results.