WD-40 results lag estimates on lower sales in Europe

Mon Oct 15, 2012 5:52pm EDT

(Reuters) - Lubricants maker WD-40 Co (WDFC.O) reported lower-than-expected fourth-quarter results due to a fall in sales in Europe, and the company forecast fiscal 2013 results below analysts' estimates.

Shares of WD-40 were down 9 percent at $46.60 after the bell on Monday. They closed at $51.34 on the Nasdaq.

Sales in Europe, which contributes one-third of total sales, fell 17 percent to $28.7 million.

"It seems pretty clear that the macroeconomic conditions, particularly outside of the United States weighed on sales trends," Stephens Inc analyst Eric Hollowaty said.

The company also said some of its sales in Europe were pushed into the first quarter of fiscal 2013.

The Asia-Pacific segment that brings in about 12 percent of revenue recorded a 3 percent dip in sales to $9.4 million.

Analyst Hollowaty said softness in industries such as construction and manufacturing, which constitute key customer bases for the company, has rippled through WD-40's results.

WD-40 competes with Clorox Inc (CLX.N) and Church & Dwight Co (CHD.N).

The company's namesake lubricant WD-40 is a spray lubricant that protects surfaces from moisture. Founded in 1953, it was first used to repel water and prevent corrosion in missiles and was later found to have various household uses.

WD-40, 3-IN-ONE Oil, and Blue Works lubricants account for most of the company's sales.

WD-40 said it expects fluctuations in input costs, global economic volatility and turbulent business conditions in Europe to continue for the foreseeable future.

The company forecast 2013 earnings of between $2.31 and $2.40 per share on sales of between $356.0 million and $370.0 million.

Analysts on average were looking for a profit of $2.56 per share on revenue of $369.3 million, according to Thomson Reuters I/B/E/S.

Fourth-quarter profit fell to $9.0 million, or 56 cents per share, from $10.2 million, or 61 cents per share, a year earlier.

Sales fell about 6 percent to $84.9 million.

Analysts on average had expected earnings of 70 cents per share, on revenue of $93.7 million.

(Reporting by Ranjita Ganesan in Bangalore Editing by Supriya Kurane)

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