Finances

WD-40 Company (WDFC) announced its third quarter earnings on Wednesday, July 10. The manufacturer of household and multi-use products exceeded revenue estimates resulting in its shares rising 13% following the release.

The company’s net sales for the third quarter totaled $155.0 million. This was up 9% from sales of $141.7 million during the same quarter last year and above analysts’ estimates of $145.8 million.

“We delivered another strong quarter with record sales driven by robust volume growth across all three of our trade blocs,” said WD-40 Company CEO, Steve Brass. “Our maintenance product sales achieved impressive growth of over 10% for both the third quarter and year-to-date, aligning with our established long-term growth objectives. Additionally, we made significant progress across all four of our Must-Win Battles, including experiencing a strong start in our newest direct market, Brazil. Overall, we are satisfied with our performance and remain confident in our ability to consistently deliver sustainable, profitable growth.”

WD-40 reported net income of $19.8 million or $1.46 per adjusted share for the quarter. This was up from earnings during the same quarter last year of $18.9 million or $1.38 per adjusted share.

WD-40’s Americas segment net sales increased by 6% reaching $75.1 million for the quarter. The Europe, Middle East, Africa and India segment reported an increase in sales of 13% in the third quarter to $59.4 million primarily due to an increase in sales of maintenance products in France and Italy. Sales in the Asia-Pacific segment rose by 14% to $20.5 million. WD-40 Company’s board of directors declared a quarterly dividend of $0.88 per share payable on July 31, 2024, to stockholders of record at the close of business on July 19, 2024. The company reaffirmed its full fiscal year 2024 guidance and expects revenue to be between $570 million and $600 million.

WD-40 Company (WDFC) shares ended the week at $239.87, up 10.8% for the week.

PepsiCo Serves Up Earnings

PepsiCo, Inc. (PEP) released its second quarter earnings report on Thursday, July 11. The beverage and snack manufacturer’s shares decreased more than 2% following the earnings report.

The company reported quarterly revenue of $22.50 billion, slightly below analysts’ estimates of $22.57 billion. This was up from $22.32 billion in revenue during the same quarter last year.

“During the second quarter, our business delivered net revenue growth, strong gross and operating margin expansion and double-digit EPS growth, remaining agile despite facing difficult net revenue growth comparisons versus the prior year, subdued category performance within North America convenient foods and the impacts associated with certain product recalls at Quaker Foods North America,” said PepsiCo’s CEO, Ramon Laguarta. “For the balance of the year, we will further elevate and accelerate our productivity initiatives and make disciplined commercial investments in the marketplace to stimulate growth.”

PepsiCo reported net income of $3.08 billion for the quarter, or $2.23 per adjusted share. This was up from $2.75 billion, or $1.99 per adjusted share in the same period a year ago.

The company’s PepsiCo Beverages North America segment revenue increased to $6.81 billion, up from $6.76 billion reported in the year prior. The Frito-Lay North America segment decreased to $5.87 billion, from $5.90 billion at the same time last year. The Quaker Foods North America segment generated revenue of $561 million for the quarter, a decrease from $684 million in revenue one year ago. PepsiCo reaffirmed its guidance for fiscal 2024, with the exception of its organic revenue expectations, which were narrowed. The company expects a 4% increase in organic revenue and plans to return a total cash return of $8.2 billion to shareholders, including $7.2 billion through the payment of dividends and share repurchases of $1.0 billion.

PepsiCo, Inc. (PEP) shares ended the week at $166.38, up 1.8% for the week.

Delta Air Lines’ Earnings Take Off

Delta Air Lines (DAL) reported second quarter earnings on Thursday, July 11. The Atlanta-based airline’s stock fell 9% after reporting profits that missed expectations.

The company posted revenues of $16.66 billion for the quarter ended June 2024. This is up 7% from $15.58 billion in revenue during the second quarter of 2023 and exceeded analysts’ estimates of $16.20 billion.

“Thanks to the incredible work of our 100,000 people, Delta is delivering industry-leading operational performance and best-in-class service for our customers,” said Delta’s CEO, Ed Bastian. “We delivered record June quarter revenue and pre-tax income of $2 billion with a 15% operating margin. Our people are the best in the industry, and we are pleased to recognize their efforts with more than $640 million accrued in the first half toward next year's profit sharing."

Delta reported net income of $1.31 billion or $2.01 per adjusted share. This was down from net income of $1.83 billion or $2.84 per adjusted share in the same quarter last year.

Delta Air Line’s second-quarter earnings were highlighted by an increase in travel demand. Domestic travel revenue increased by 5% to $9.40 billion during the quarter. International passenger revenue jumped 4% as transatlantic travel remains strong. Delta’s total passenger revenue was $13.84 billion, a 5% increase from the prior year. With domestic and international travel demands on the rise, the company expects the third quarter to continue its upward trend with revenue up 2% to 4%.

Delta Air Lines (DAL) shares ended the week at $43.62, down 6.8% for the week.

The Dow started the week of 7/8 at 39,392 and closed at 40,000 on 7/12. The S&P 500 started the week at 5,573 and closed at 5,615. The NASDAQ started the week at 18,372 and closed at 18,398.

U.S. Treasury yields dropped early in the week as investors reacted to the latest inflationary data impacting the cost of goods and services. Yields rose on Friday as investors responded to better-than-expected unemployment numbers.

On Thursday, the U.S. Department of Labor announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, fell 0.1% in June, lower than economists’ expected growth of 0.1%. The CPI year-over-year increased to 3.3% but missed economists' expectation of a 3.5% increase year-over-year.

“With another good CPI print under their belt, the window is open for the Federal Reserve to cut interest rates as early as September, and potentially again in December, assuming the inflation data continues to cooperate,” said chief investment officer at Regan Capital, Skyler Weinand.

The benchmark 10-year Treasury note yield opened the week of July 8 at 4.29% and traded as low as 4.17% on Thursday. The 30-year Treasury bond opened the week at 4.49% and traded as low as 4.38% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 17,000 to 222,000 for the week ending July 6. Continuing unemployment claims decreased by 4,000 to 1.85 million.

“Take a step back from seasonal noise, the claims data are consistent with a labor market characterized by a slower pace of hiring but still relatively few layoffs,” wrote Nancy Vanden Houten of Oxford Economics.

The 10-year Treasury note yield finished the week of 7/8 at 4.19%, while the 30-year Treasury note yield finished the week at 4.40%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, July 11. The survey showed mortgage rates slightly decreasing for the week but remaining close to 7%.

This week, the 30-year fixed rate mortgage averaged 6.89%, down from last week’s average of 6.95%. Last year at this time, the 30-year fixed rate mortgage averaged 6.96%.

The 15-year fixed rate mortgage averaged 6.17% this week, down from 6.25% last week. During the same week last year, the 15-year fixed rate mortgage averaged 6.30%.

“Following June’s jobs report, which showed a cooling labor market, the 10-year Treasury yield decreased this week and mortgage rates followed suit,” said Freddie Mac’s Chief Economist, Sam Khater. “We are also seeing more inventory on the market, including a fair number of listings with price cuts, which is an encouraging sign for prospective buyers.”

Based on published national averages, the savings rate was 0.45% as of 6/17. The one-year CD averaged 1.86%.

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