3M shares gained 2.5% after CEO Brown reported Q1 EPS up 14% with 30bps margin expansion, double-digit free cash flow and organic revenue growth just over 1%, driven by double-digit orders. The company forecasts above 3% organic growth in Q2, data-center segment +50% and plans $800M JV closing.
3M reported first-quarter EPS rose 14% year-over-year with 30 basis points of margin expansion. The company delivered double-digit free cash flow growth, organic revenue up just over 1% and saw orders increase by double digits.
Management expects organic growth above 3% in the second quarter, driven by strong order and backlog conversion. Approximately 60% of the portfolio, including general industrial and safety segments, achieved mid-single-digit growth in the first quarter.
The inside-data-center business expanded more than 50% each quarter, supported by validation of the optical fiber interconnect EBO technology and a major hyperscaler order scheduled for delivery in the second half. The addressable market for optical data-center connects has grown from over $1 billion to north of $2 billion.
The Madison Fire & Rescue joint venture will close July 1, creating an $800 million business with 3M owning 51% and returning $700 million in cash to the parent. The company also targets more than $300 million in growth above macro shifts this year while delivering half of its $1 billion productivity goal.
