What happened

Bottle maker O-I Glass (OI 1.40%) "missed earnings" badly when it reported its Q2 2020 financial results after market close yesterday evening, but then something strange happened.

O-I Glass stock went up, not down. In fact, as of 2 p.m. EDT Tuesday, O-I Glass shares are up a good 11.4%. Why?

A glowing green arrow climbs on a stock screen.

Image source: Getty Images.

So what

After all, heading into earnings, analysts had forecast that O-I Glass would earn pro forma profits of $0.07 per share on sales of $1.46 billion. In actual fact, the company earned only $0.01 per share, and on less-than-expected sales of $1.4 billion -- misses on both counts. CEO Andres Lopez conceded that "the first half of 2020 was the most challenging business environment in decades given the sudden onset of the pandemic."

Worse, actual profits from continuing operations, as calculated according to generally accepted accounting principles (GAAP), were a dismal negative $0.64 -- versus $0.42 earned in the year-ago quarter.

Now what

Nevertheless, Lopez sounded a hopeful note, confiding that "after enduring the brunt of COVID-19 in April and May, O-I's sales volume improved significantly in the latter part of the quarter as markets started to reopen."

Based on these trends, O-I is guiding investors to expect a 4% to 7% decline in bottles shipped through the end of this year, which is better than its previous forecast of a 5% to 10% decline. Indeed, Q3 results might even be "flat" against last year's -- which in ordinary times would probably be taken as bad news (because investors like businesses that are growing).

Then again, these are not ordinary times. Investors today are hearing "4% to 7% decline" -- and cheering.