It's uncharacteristic for 3M (MMM 0.16%) to underperform significantly, but for most of 2015, that's what it did. At one point, it had fallen 10.5 percentage points behind the S&P 500's performance for the year. But its Q4 report allowed it to catch up to the index decisively, rising 5.2% on the day of the announcement and 4.3% over the course of the next three days. 3M's performance in January ran 3.8 percentage points ahead of the S&P 500.

What happened?
Before markets opened on Jan. 26, 3M reported Q4 EPS of $1.66, slightly better than analysts' consensus of $1.63. Revenue was down, but not as much as analysts had forecast, and cash flow, although down 3.1%, remained strong. 3M reiterated its earlier guidance of 2016 earnings of $8.10 to $8.45 per share, and organic sales growth, excluding currency effects, of 1% to 3%.

On the face of it, this is not a cause for such celebrations. Currency effects are likely to offset most, if not all, of that organic revenue growth. What 3M is telling investors is that, in its fifth year of little or even declining revenue growth, it will still manage to increase EPS in 2016. Much of this will come from share repurchases -- $5.2 billion worth in 2015 -- but some will come, once again, from margin improvements. Some of these were disguised by restructuring charges; without those, Q4 EPS would have come in at $1.80. That's pretty remarkable.

What's the takeaway?
The basic outlook for 3M's businesses isn't strong. While it suffered from earlier inventory-building by its customers, and the resulting decline in orders during 2015 as customers drew down those inventories, a strong rebound isn't likely. Demand from a few industrial sectors, such as the automotive industry, remains healthy, but by and large, it isn't.

Performance has been bolstered by its healthcare and consumer businesses, considerably less cyclical businesses that have been known to help 3M through difficult times in the past. But they can't offset weakness throughout the rest of the company, and they can't make up for what will continue to be strong currency headwinds for most of 3M's business.