NEW YORK (TheStreet) -- Shares of WD-40 Co. (WDFC - Get Report) are down -1.04% to $75.32 in after-hours trading on Wednesday following the company's third quarter 2014 financial results which failed to meet analysts' expectations.
For the most recent quarter the consumer products company, which is dedicated to delivering solutions for a variety of maintenance needs, reported net earnings of $10.4 million, or 69 cents per share, missing expectations of 72 cents.
WD-40's total net sales increased 3% over the 2013 quarter to $95.7 million for the 2014 third quarter.
Separately, TheStreet Ratings team rates WD-40 CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WD-40 CO (WDFC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.5%. Since the same quarter one year prior, revenues slightly increased by 8.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.17, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $7.60 million or 12.93% when compared to the same quarter last year. In addition, WD-40 CO has also modestly surpassed the industry average cash flow growth rate of 3.52%.
- WD-40 CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WD-40 CO increased its bottom line by earning $2.54 versus $2.20 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $2.54).
- The gross profit margin for WD-40 CO is rather high; currently it is at 52.42%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.95% trails the industry average.
- You can view the full analysis from the report here: WDFC Ratings Report