Industrial conglomerate 3M (NYSE: MMM) announced better-than-expected revenue in Q4 CY2025, with sales up 5.6% year on year to $6.13 billion. Its non-GAAP profit of $1.83 per share was 1.7% above analysts’ consensus estimates.

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Company Overview

Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. 3M struggled to consistently generate demand over the last five years as its sales dropped at a 5.4% annual rate. This wasn’t a great result and suggests it’s a lower quality business.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. 3M’s annualized revenue growth of 2.3% over the last two years is above its five-year trend, but we were still disappointed by the results.

3M also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, 3M’s organic revenue averaged 1.7% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, 3M reported year-on-year revenue growth of 5.6%, and its $6.13 billion of revenue exceeded Wall Street’s estimates by 3.3%.

Looking ahead, sell-side analysts expect revenue to grow 2.7% over the next 12 months, similar to its two-year rate. This projection is underwhelming and implies its newer products and services will not accelerate its top-line performance yet.

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Operating Margin

3M has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 9.4%, higher than the broader industrials sector.

Looking at the trend in its profitability, 3M’s operating margin decreased by 2.6 percentage points over the last five years. Even though its historical margin was healthy, shareholders will want to see 3M become more profitable in the future.

In Q4, 3M generated an operating margin profit margin of 13%, down 5.7 percentage points year on year. Since 3M’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for 3M, its EPS and revenue declined by 2.8% and 5.4% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, 3M’s low margin of safety could leave its stock price susceptible to large downswings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For 3M, its two-year annual EPS growth of 15.6% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q4, 3M reported adjusted EPS of $1.83, up from $1.68 in the same quarter last year. This print beat analysts’ estimates by 1.7%. Over the next 12 months, Wall Street expects 3M’s full-year EPS of $8.06 to grow 6.6%.

Key Takeaways from 3M’s Q4 Results

We enjoyed seeing 3M beat analysts’ revenue expectations this quarter. Looking ahead, full-year EPS was in line with expectations. Overall, this print was fine but not too impressive. The market seemed to be hoping for more, and the stock traded down 1.4% to $165.45 immediately after reporting.

So should you invest in 3M right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).