Full Transcript: 3M Q2 2026 Earnings Call

3M (NYSE: MMM ) held its second-quarter earnings conference call on Tuesday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

40, up 11%. 3 billion with a 107% conversion rate. The company raised its full-year guidance for sales, EPS, and free cash flow, citing strong execution of strategic priorities and commercial initiatives. Notable strategic initiatives include ongoing commercial excellence, cross-selling efforts, and an accelerated pace of new product introductions, with 92 new products launched in Q2.

3M is in the process of transitioning to a more integrated operating company model, focusing on simplifying and standardizing processes and enhancing its portfolio. The company closed the acquisition of Madison Fire and Rescue, forming a new joint venture with Scott SCBA, and announced a strategic partnership with Microsoft for its Expanded Beam Optics technology. Management noted strong performance in China with double-digit growth and outlined continued focus on key growth areas such as industrial adhesives, safety, and data centers.

3M is optimistic about future growth, aiming for above-market performance through its innovation and commercial excellence, with plans to launch over 350 new products this year. Full Transcript OPERATOR Ladies and gentlemen, thank you for standing by. Welcome to the 3M second quarter earnings conference call. During the presentation, all participants will be in a listen-only mode.

Afterwards, we will conduct a question-and-answer session. At that time, if you do have a question, please press star one on your telephone keypad. As a reminder, this call is being recorded Tuesday, July 21, 2026. I would now like to turn the call over to Chinmay Trivedi, Senior Vice President of Investor Relations and Financial Planning and Analysis at 3M.

Chinmay Trivedi, Senior Vice President of Investor Relations and Financial Planning and Analysis Thank you. Good morning everyone and welcome to our quarterly earnings conference call. With me today are Bill Brown, 3M's Chairman and Chief Executive Officer, and Anurag Maheshwari, 3M's Chief Financial Officer. Bill and Anurag will make some formal comments, then we will take your questions.

com. Please turn to slide 2 and take a moment to read the forward-looking statements. During today's conference call, we'll be making certain predictive statements that reflect our current views about 3M's future performance and financial results. These statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties.

Item 1A of our most recent Form 10-Q lists some of the most important risk factors that could cause actual results to differ from our predictions. Please note, throughout today's presentation we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in the attachments to today's press release. With that, please turn to slide 3 and I will hand the call off to Bill.

Bill. Bill Brown, Chairman and CEO Thank you, Chinmay, and good morning, everyone. 3 billion with 107% conversion. 4 billion to shareholders in the quarter, including $400 million in dividends and $1 billion of share repurchases.

6 billion to shareholders against our commitment to return $10 billion plus through 2027. Given our strong first half performance, we're raising our guidance for the year for sales, EPS, and free cash flow. Our results today exceeded our expectations, demonstrate the progress we're making to build a higher-performing company, and continue to give us confidence we're on the right path forward. The strategy we put in place two years ago was delivering results, and we're building momentum in executing against our strategic priorities.

Commercial excellence initiatives continue to drive results through improved salesforce effectiveness and stronger account execution supported by AI-enabled tools that enhance planning, prioritize opportunities, and accelerate productivity. Cross-selling continues to outperform expectations with $110 million of opportunities booked, another $120 million in the pipeline, up over 40% quarter over quarter, and putting us ahead of the goal we set at our investor day. We're rebuilding the innovation engine at 3M and significantly accelerating our pace of new product introductions.

In the quarter we launched 92 new products, up 44% versus last year, bringing our first half total to 176 launches and putting us on track to deliver more than 350 new products this year. The benefits are showing up in our results and I'll talk more about our innovation journey in a moment. Our focus on operational discipline and productivity improvement continues to create value across the enterprise. Cost of poor quality improved 60 basis points year over year, while overall equipment effectiveness improved 140 basis points.

As asset utilization improves, we're able to consolidate production into fewer assets, optimize our manufacturing footprint, and retire older and less efficient equipment. While overall utilization remains a long-term opportunity, there are pockets in our manufacturing network today where capacity is constrained and short of demand. One example is our New