WD-40 hares slip following lackluster 1st-qtr sales report, though profit rose 22 pct

WD-40 shares fall on disappointing 1Q sales

NEW YORK — Shares of WD-40 Co., which makes cleaning, home care and maintenance products like WD-40 and 3-in-One lubricants, dropped Tuesday following its report of lackluster first-quarter sales.

The company said late Monday that its revenue for the three months that ended Nov. 30 fell 7 percent to $77.7 million from $83.6 million. Wall street analysts surveyed by Thomson Reuters on average had estimated of $81.3 million.

WD-40, based in San Diego, said foreign currency exchange rates lowered its sales results by $1.8 million.

Multi-purpose maintenance product sales, including WD-40 and 3-in-One, slipped 8 percent to $60.7 million, while sales of all its other brands dipped 4 percent to $17 million.

Liam Burke of Janney Capital Markets remained optimistic, saying WD-40’s market-driven strategy and geographic diversity will help it grow through new product launches and overseas expansion.

“The company has the assets in place to compete on a global basis and capitalize on higher-growth markets such as China and India,” he wrote in a client note.

Burke maintained a “Neutral” rating.

WD-40’s first-quarter earnings performance was better than its sales. It posted profit of $9.4 million, or 56 cents per share, compared with $7.7 million, or 46 cents per share, a year ago — a 22 percent increase and better than the 51 cents’ profit analysts expected. Analysts polled by Thomson Reuters normally exclude one-time items from their estimates.

Total operating expenses declined 5.6 percent, to $25.2 million from $26.7 million, while advertising and promotional expenses dropped 4 percent.

Gross profit increased to $39.9 million from $38.7 million. Gross margin was 51.4 percent for the quarter, up from 46.3 percent in the prior-year period.

WD-40 anticipates a fiscal 2010 profit of $1.80 to $1.95 per share on sales of $298 million to $318 million.

Analysts predict full-year earnings of $1.92 per share on revenue of $305.4 million.

The company’s stock declined $1.05, or 3.2 percent, to $31.45 in afternoon trading. Over the past year, the shares have traded in a range of $21.81 to $34.55.