3M Beats Q3 Forecasts, Raises Guidance as Amazon Deal Lifts the Stock

3M beat third-quarter forecasts on Tuesday and raised its full-year earnings guidance, but the number that moved the stock was not in the earnings table. It was a deal with Amazon, announced a day earlier, that puts the maker of Post-it Notes inside the AI data center buildout.

Adjusted earnings came in at $2.50 a share, ahead of the $2.38 to $2.39 analysts expected, and up 12 percent from a year earlier on the company's new reporting basis. GAAP earnings were $2.63 a share, up 70 percent. Sales were $6.6 billion, with adjusted sales growth of 4.2 percent and organic growth of 3.3 percent. A year ago, 3M earned $2.19 a share on $6.2 billion in sales.

The company raised its 2026 adjusted earnings forecast to $9.10 to $9.15 a share, from $8.80 to $8.95, and kept its call for adjusted sales growth above 4.5 percent. The GAAP operating margin was 23.7 percent, and the adjusted margin was 26.2 percent. 3M generated $0.5 billion in operating cash flow and $1.2 billion in adjusted free cash flow in the quarter, and returned $0.6 billion to shareholders in dividends and buybacks. Safety and Industrial led the segments, with organic growth of 7.0 percent.

"We delivered another quarter of strong results, including solid sales growth, continued margin expansion, double-digit EPS growth, and robust free cash flow," chief executive William Brown said in the results release.

The Amazon deal

On Monday, 3M announced a broader strategic commercial partnership with a wholly owned Amazon subsidiary covering optical connectivity and other data center products. Amazon received warrants for 3.2 million 3M shares. The warrants vest after Amazon spends $6 billion with 3M. 3M is also working with Genius Electronic Optical on expanded beam optics, a fiber optic connection technology, and has invested in the company.

Fiber optic cable carries most of the data between server racks inside AI data centers, moving it at close to the speed of light. Every new data hall needs miles of it, plus the connectors that join it. That is the business 3M is buying into: not the chips or the software, but the physical links the whole system depends on.

Barron's reported that shares rose about 2 percent in early trading on Tuesday, with the Amazon deal doing as much of the lifting as the earnings beat. The stock had gained only about 1 percent this year before Tuesday and traded near 17 times expected earnings, down from almost 20 times a year ago.

Why it matters

3M has spent years as a slow, steady industrial company working through legal settlements and a weak consumer business. The Amazon partnership gives investors a different story: a materials company with a direct line into the data center spending boom, tied to the largest cloud buyer in the world, with the $6 billion spending threshold written into the warrant terms.

For everyone else, the deal is one more sign of how wide the AI buildout has spread. The money no longer flows only to chip designers and cloud platforms. It reaches the companies that make cable, connectors, adhesives and cooling parts, often firms most people have never thought of as tech companies at all.

Key numbers

Adjusted earnings per share: $2.50, against about $2.39 expected. Sales: $6.6 billion, with organic growth of 3.3 percent. GAAP earnings per share: $2.63. New 2026 guidance: $9.10 to $9.15 a share. Amazon warrant: 3.2 million shares, vesting after $6 billion in Amazon spending on 3M data center products.

What happens next

The warrant structure means the Amazon deal pays off in stages. Investors will watch for the first orders under the partnership, and for whether data center revenue starts showing up as a named line in 3M's results. The next test is the fourth quarter, when the raised guidance has to hold against the consumer and industrial demand that still pays most of 3M's bills.