The St. Paul, Minn.-based diversified manufacturing company reported adjusted earnings of $2.59 per share, which was a penny above estimates, according to FactSet. Revenue of $8.39 billion also narrowly topped forecasts calling for $8.37 billion.
"Importantly, 3M posted organic sales growth of 5.6%, a result above what many analysts expected and proved that sales could bounce back from its first-quarter earnings result mishap of 2.8% organic growth," Jim Cramer and the Action Alerts PLUS team wrote in a note to subscribers. "The quarter was not clean as can be, as there was some operating margin put and takes and management did disclose that the terrific 5.6% organic sales increase included a 50 to 100 basis point boost from customers accelerating purchases ahead of 3M's ERP roll out in North America, but it was encouraging results nonetheless."
Still, 3M trimmed the upper-end of its full-year adjusted earnings guidance and now expects EPS to be in the range of $10.20 to $10.45, compared to its previous outlook of $10.20 to $10.55 per share. Cramer and his team noted that the revised forecast reflects "the impact of the divested income associated with 3M's communication markets business."
Furthermore, management said it now anticipates foreign currency translation to add approximately 1% to full-year sales growth versus a prior expectation of 2%.
Out of the company's business segments, the industrial group performed the best with sales of $3.15 billion, an increase of 6.8% year over year, which exceeded expectations.
"Each business within Industrial saw their sales increase, led by separation and purification, advanced materials, abrasives, and industrial adhesives and tapes," Cramer said. "3M's automotive aftermarket business picked up too, achieving mid-single digit growth in the quarter."
Cramer and team also noted that the solid auto results appear better than Illinois Tool Work's results yesterday.
Shares of 3M rose 0.7% to $200.16 at 3:05 p.m.