Earnings Preview For WD-40 (WDFC)

WD-40 Company WDFC will be reporting 2011 fiscal second-quarter results after the closing bell today. Analysts are expecting a profit of $0.67 per share on revenues of $86.67 million. Earnings estimates have remained constant over the past 90 days. Earnings would grow by 4.70% if the consensus estimate were to be met. The company produces and sells lubricants, hand cleaners, and household cleaners worldwide. It primarily offers WD-40, a multi-purpose product, which acts as a lubricant, rust preventative, penetrant, cleaner, and moisture displacer; 3-IN-ONE Oil, a drip oil for household consumers that has applications in the areas of locksmithing, HVAC, marine, farming, construction, and jewelry manufacturing. Investors will be paying attention to how the company is controlling its expenses in an environment where the cost of raw materials is increasing rapidly. Historically, management has done a good job of offsetting higher costs, but this is an area of concern. The company has also stated that gross margins should come in over 50%, and this number will be looked at closely. The stock is currently trading at 18.8x current-year estimates of $2.31 per share and has a market capitalization of $740 million. It is thinly traded as only 77,400 shares change hands on average on the NASDAQ. The company has exceeded earnings targets in three of the previous four quarters, with the lone miss occurring last quarter. The stock is trading at a new 52-week high and the company would likely need to exceed the published estimate for the stock to move higher.