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Shares of 3M Company MMM have gained 8.9% since it reported first-quarter 2025 results on April 22. The company recorded year-over-year growth for both earnings and revenues (on an adjusted basis) in the quarter, with the latter falling short of the Zacks Consensus Estimate.
Nevertheless, 3M’s shares have surged 49% over the past year compared with the Zacks Diversified Operations industry and the S&P 500’s growth of 4.2% and 8.3%, respectively. The company has also outperformed other industry players like and Honeywell International Inc. HON and Carlisle Companies Incorporated CSL, which have gained 2.8% and declined 5.5%, respectively, over the same time frame.
MMM Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
Let us delve deeper into 3M’s first-quarter results and long-term prospects before assessing whether to buy, hold or sell the stock.
Decoding 3M’s Q1 Results
In the first quarter, adjusted revenues improved 1.5% year over year to $5.78 billion but narrowly missed the consensus estimate of $5.79 billion. However, its adjusted earnings of $1.88 per share surpassed the consensus estimate of $1.77 and increased 10% year over year. The year-over-year increase was primarily driven by strength across the electrical, aerospace, advanced materials and industrial adhesives & tapes markets.
In the quarter, revenues from the electrical, industrial adhesives and tapes markets grew in the high-single-digit range, while the same from roofing granules, industrial specialties and personal safety markets increased in the low-single-digit range. Also, revenues from the aerospace market increased in low-double-digit, and the same from the advanced materials market grew in high-single-digit.
What’s Driving the Stock?
3M has been witnessing strong momentum in the Safety and Industrial segment, driven by strength in the electrical, industrial adhesives and roofing granules markets. Significant orders for power cable accessories in the United States, driven by an increase in demand from data centers, augur well for the segment in the quarters ahead. However, soft demand in the auto aftermarket and abrasives markets remains a concern. The segment’s organic sales improved approximately 2.5% year over year in the first quarter of 2025.
The company’s Transportation and Electronics segment has been benefiting from strength in the transportation and aerospace end markets. Solid electronics demand, backed by an increase in production volume by electronics original equipment manufacturer (OEM) customers, is proving beneficial for the segment. However, weakness in the automotive electrification market, due to a decline in automotive OEM build rates, remains a concern.
The segment’s adjusted organic revenues grew 1.1% in the first quarter of 2025. Backed by strength across its businesses, the company provided a positive outlook. For 2025, it continues to expect total adjusted organic sales to grow 2-3% on a year-over-year basis.
The company also remains focused on increasing shareholders’ wealth through dividend payments and share buybacks. In the first quarter of 2025, it paid dividends worth $396 million and repurchased shares for $1.27 billion. In February 2025, MMM’s board also approved a share buyback program, authorizing it to repurchase up to $7.5 billion of common stock. In 2025, it anticipates a gross share repurchase of around $2 billion. Also, in February 2025, the company hiked its quarterly dividend by 4.3%.
