WD-40's (NASDAQ:WDFC) stock isn't binding up. Although it rose almost 8% in yesterday's market session, the fun was short-lived, as it lost all those gains in after-hours trading. What was the catalyst? Earnings, of course; let's take a look at them and see what caused the volatility.

Net sales for the company's third fiscal quarter increased 6% to $77.6 million. Net profit increased more than 8% to $7.6 million. Earnings per diluted share were $0.44, which was two pennies better than a year ago.

Although this wasn't a quarter of overpowering growth, it sure beat results from the last reporting period. Back in January, WD-40's profit and earnings per share were down. So, I definitely had a more upbeat feeling this time around. Keep in mind, though, that operating income essentially was flat -- WD-40 powered the bottom line through a reduction in interest expense and an increase in "other" income.

The nine-month cash flow statement suited me just fine. Operational cash flow increased 43% to $37.4 million, and free cash flow jumped more than 50% to $35.8 million. The company paid out $12.3 million in dividend payments, so a lot of free cash was left over for other purposes.  

Like I said earlier, the stock experienced some selling during the after-hours session and is down today, too. The underlying causes were easily identified. First, Mr. Market's grand expectations weren't met: WD-40 missed the earnings forecast by three pennies. Second, and perhaps more relevant, the company changed its outlook for the year. Previously, management felt it could deliver earnings per share somewhere between $1.70 and $1.85. Now, the top end of the range has been significantly reduced, and expectations are for earnings to end up somewhere between $1.70 and $1.75.

However, there is one bright spot to this earnings-reduction news. It has to do with China. WD-40's investment in this very important global marketplace is the reason behind the potential earnings shortfall. If you believe in the promise of this region, then you probably would be wont to categorize the changed outlook as just another bit of short-term noise. I'd say there's merit in such thinking. Consumer-products concerns such as Procter & Gamble (NYSE:PG), Clorox (NYSE:CLX), Colgate-Palmolive (NYSE:CL), and Unilever (NYSE:UL) all recognize the value of having an intense global footprint.  

I haven't been the biggest fan of WD-40 in the past, but I don't think it constitutes anything close to a bad business organization. It owns recognizable brands, it pays dividends, and the stock yields, as of this writing, close to 3%. Still, I'm not inclined to be fully bullish just yet. Again, operating income didn't see much growth, and the gross margin took a dip. I would not, however, discourage any interested Fool from performing further due diligence, especially considering the slick yield.

Colgate-Palmolive is a member of the Motley Fool Inside Value portfolio. Philip Durell is obsessed with finding stocks trading below their true value. Sign up for a free trial today to check out his market-beating methods. Unilever is a Motley Fool  Income Investor recommendation.

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Fool contributor Steven Mallas owns none of the companies mentioned. As of this writing, he was ranked 15,776 out of some 60,000 investors in the CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.