Usually, when a stock is up 23% after an earnings release, it is due to spectacular outperformance and a significant hike in guidance. Some of that applies to 3M (NYSE: MMM). However, the real takeaway from the report is that long-suffering 3M shareholders heard a lot of what they wanted to hear from new CEO Willliam Brown. Here's the lowdown and why Brown's commentary made such a refreshing change.
Before discussing the qualitative issues, let's examine the numbers that helped propel the stock. In a nutshell, a combination of some improvements in key end markets like consumer electronics, semiconductors, and automotive aftermarket, and improving margin performance due to ongoing restructuring actions, helped 3M to better-than-expected second-quarter earnings.
As such, management hiked the midpoint of its margin and earnings expectations for the full year. While the increase in the midpoint of the full-year earnings per share (EPS) guidance from $7.05 to $7.15 is welcome, it's not enough to justify the increase in the share price post-results.
Source Fool.com