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Source: Wikipedia.

Advanced materials company 3M (NYSE:MMM) reported solid second-quarter earnings earlier this summer. The box score read like this: Sales were up 4.9%, profit margins grew 0.8%, and earnings per share jumped 11.7% year over year. Not too shabby for a 112-year-old manufacturer.

For investors who want a more in-depth view, however, it's helpful to look beyond these headlines. Read the 10-Q to get a sense of what's happening on the field. Or, better yet, join in on the huddle to see what management has to say about its game plan.

After listening in on the quarterly conference call, here are my top five takeaways from 3M's management team:

On what's driving growth:

In industrial, for example, automotive volumes grew four times the rate of global [automobiles]. And in 3M Purification formally known as CUNO, organic growth was 13% and we see this business accelerating in many areas of the world.
-- CEO Inge Thulin

3M makes hundreds of products in a handful of business segments, including industrials, safety and graphics, electronics and energy, healthcare, and consumer. The main driver of the business in 2014 has been the first of those, industrials, which also happens to be the largest.

At a more granular level, the industrials business is speeding ahead because the global car market is on the rise. While 3M doesn't disclose the specific growth rate of this segment, keep in mind that U.S. car sales were expected to jump 6.5% year over year during the summer. By comparison, 3M says its automotive sales are growing at four times that rate, implying that the company is also gaining considerable market share relative to its competitors.

On swelling profit margins:

Premium margins remain a hallmark for 3M. In the second quarter, margins rose to nearly 23%, up 80 basis points from last year. I am pleased that all five business groups delivered margins greater than 20%, demonstrating the breadth of our strength.
-- Thulin

3M's robust margins make its competitors green with envy. At 22.8%, the company's operating margins are head-and-shoulders above the 14.9% average posted by the overall industry. That's a difference of 53%, a testament to 3M's strong brand and its wide portfolio of best-in-class products.

Scotch Tape

3M's classic Scotch tape brand. Premium products generate above-average profit margins at 3M.

On showing shareholders the money:

We also paid $1.1 billion in cash dividends in the first six months of 2014, up $246 million year on year. Gross share repurchases were $3.1 billion during that same period. For full year 2014, we expect gross share repurchases will be in the range of $4.5 billion to $5 billion versus a previous expectation of $4 billion to $5 billion.
-- CFO Nick Gangestad

A rising dividend payout is great news for shareholders. Over time, 3M has earned its position on the list of S&P 500 "Dividend Aristocrats" due to 25 consecutive years of increased payouts. It looks like this year will be business as usual in that respect.

With regard to the share buybacks, however, investors might have some concerns. The company spent 57% more on share repurchases in the first six months of 2014 than it did in the same period of 2013. And this comes at a time when its stock hardly looks cheap.

3M currently trades at 20.5 times earnings, which is 5% higher than the industry average of 19.6, and 10% higher than the overall S&P 500 average. This is also 24% higher than its five-year historical price level.

A few years back, with 3M shares trading at 13 or 14 times earnings, buybacks would have seemed savvy and timely. Today, the company's ambitious plan to repurchase $17 billion to $22 billion in shares through 2017 looks like a recipe for value destruction.

On acquiring its Japanese subsidiary outright:

[L]ast week we announced our plan to acquire the remaining 25% of our Sumitomo subsidiary at a price of $885 million ... Upon closing of the deal, 3M will have full control of one of our largest and more successful subsidiaries. We look forward to growing this business even further into the future.
-- Thulin

Management briefly touched on bringing 3M's Japanese subsidiary, known as Sumitomo, under the company's umbrella. All things considered, it was a low-risk transaction since Sumitomo was already operationally under 3M's control. The timing seems right given the fact that companies like 3M are awash with cash overseas that cannot easily be repatriated without significant U.S. tax consequences.

Looking ahead, management expects Sumitomo to enhance 3M's earnings per share by roughly $0.08 over the next 12 months.

On the step-by-step process for going global:

When you think about our business group in industrial, that's the biggest business group for us and also the business group that we are historically and still today entering first when we go into new markets based on the size and scale and so forth and that's the way we have talked about how we build out businesses from infrastructure, industrial, safety, consumer, and healthcare, as the economies evolve.
-- Thulin

There was some confusion among analysts on the conference call as to why margins in the industrials business were down 0.6% whereas the operating margins for the company were up 0.8%. Industrials, of course, is the biggest division and it contributes roughly 35% of the company's overall revenue.

Management responded by noting that industrials does not always move in lockstep with the overall company because of the way 3M opens up shop overseas, as explained above. A much greater portion of international sales is driven by industrials -- up to 45% in emerging markets, for example -- and profitability levels in new areas need time to catch up to more seasoned markets. Therefore, it's actually more impressive that margins are expanding in spite of the slight decline in 3M's largest segment.

The takeaway for investors

There's a lot to like at 3M. As management pointed out, profit margins are healthy, diversification provides stability, and international exposure is built-in for investors. These characteristics bode well for long-term shareholders.

On the flip side, the stock is not cheap considering that revenue and earnings growth typically hover around 5% to 6% per year. Meanwhile, management is scooping up massive amounts of shares at a price that's 21 times the company's trailing earnings. Investors would be wise to tread lightly with this stock for now.

Isaac Pino, CPA, has no position in any stocks mentioned. The Motley Fool recommends 3M. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.