WD-40 shares hit new high on strong 3Q results
Shares of WD-40 rise to all-time high on strong fiscal 3rd-qtr results, FY guidance boost
NEW YORK (AP) -- Shares of WD-40 Co. rose to an all-time high Tuesday after the maintenance and cleaning product company reported better-than-expected quarterly results and boosted its profit prediction for the full year.
THE SPARK: WD-40's fiscal third-quarter profit of 66 cents per share beat average Wall Street estimates by a dime.
The company said it now expects to earn $2.40 to $2.48 per share for its current fiscal year, which ends in August. It previously projected income of $2.32 to $2.42 per share, while analysts expect a profit of $2.39 per share.
THE BIG PICTURE: WD-40 Co. said its quarterly results got a boost from higher sales of multipurpose maintenance products like its namesake WD-40 spray lubricant. Sales of those items increased 12 percent to $82.2 million.
The jump more than made up for a decrease in sales of homecare and cleaning products. WD-40 also said its profit margins improved, as advertising and sales promotion costs decreased.
THE ANALYSIS: Janney Capital Markets analyst Liam Burke predicted that WD-40's revenue growth will continue into 2014.
"With its global sales and distribution infrastructure and its strength in brand development, WD-40 is in excellent position to grow revenues on a worldwide basis," Burke wrote in a note to investors.
But despite the continued strong growth prospects, the analyst said he thinks WD-40 shares are fairly valued. He boosted his fair value estimate by $8 to $58, but backed his "Neutral" rating for the stock.
THE SHARES: Up $3.10, or 5.4 percent, to $60.75 in midday trading, after peaking at an all-time high of $64.23 earlier in the session. Since the beginning of this year, the shares have gained about 23 percent.
