3M boosts annual profit forecast driven by resilient industrial unit

By Aatreyee Dasgupta

July 21 (Reuters) - 3M ‌raised its ​full-year profit ​forecast on Tuesday, driven by strength in its safety & industrial business, as well as price hikes, which are expected to "fully offset" a ‌hit to its profit from oil-led inflation.

The industrial giant's shares jumped ⁠nearly 10% in early trading.

3M now expects full-year adjusted profit per share between $8.80 and $8.95, compared ‌with its earlier forecast of $8.50 ‌to $8.70.

The company said it expects price actions implemented during the quarter to cover oil-led inflation impact of $150 million to $175 million counted in the profit forecast.

3M ​previously estimated a $125 million hit from higher oil prices amid escalating U.S.-Iran tensions and resulting disruptions to energy supplies through the Strait of Hormuz.

The company's ⁠cost cuts, price hikes and the introduction of new products and customer service initiatives under CEO William Brown ​have helped the company cushion margins from weak demand against the backdrop of prolonged inflation.

Its largest segment by sales, the ​safety and industrial segment, saw an over 8% ‌rise in quarterly sales from a year ago, helped by strong demand across electrical markets, adhesives, abrasives and industrial specialties, ⁠as roofing granules returned to growth.

The transportation and electronics segment's ongoing weakness in autos was offset by strength in data centers and the semiconductor business, resulting in nearly 6% ⁠segment sales growth.

Last week, Microsoft became the first hyperscaler to adopt 3M's Expanded Beam Optics (EBO) technology ​for AI data centers.

On a post-earnings call on Tuesday, 3M CEO Bill Brown said EBO revenue could increase four to five times from its current annual level of $40 million to $50 ‌million.

Maplewood, Minnesota-based 3M's quarterly adjusted profit came in at $2.40 per share, compared with analysts' estimate of $2.25, according to LSEG-compiled data.

Second-quarter ‌revenue rose 2.4% to $6.50 billion from a year ago. Analysts on average had expected $6.41 ⁠billion.

3M's shares had risen 23.2% ‌since January 2025 up to ​the stock's last close, versus a 21.3% gain for the Dow Jones Industrial Average.

(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by ‌Maju Samuel)

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