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Sturm, Ruger (RGR) Beats on Q4 Earnings; Expenses Rise
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Leading publicly traded U.S. firearms maker, Sturm, Ruger & Company, Inc.’s (RGR - Free Report) fourth-quarter 2016 earnings of $1.10 per share surpassed the Zacks Consensus Estimate of 91 cents by 20.9%. Earnings also rose 25% from 88 cents earned in the year-ago quarter on higher sales.
For 2016, the company reported earnings of $4.59 per share, which exceeded the Zacks Consensus Estimate of $4.37 by 5%. The full-year earnings figure registered an improvement of 43% from the equivalent figure at 2015-end.
Sturm, Ruger & Company, Inc. Price and EPS Surprise
The company reported revenues of $161.8 million in the fourth quarter, up 6.2% from the prior-year figure of $152.4 million. The top line also comfortably surpassed the Zacks Consensus Estimate of $154 million. The upbeat performance can be attributed to elevated product sales across all segments.
In 2016, the company generated revenues worth $664.3 million, up 20.5% year over year. The top line also exceeded the Zacks Consensus Estimate of $656.5 million.
Firearm sales (comprising 99.1% of total sales) increased 20.8% while castings sales declined 5.6%. New product sales accounted for 29% of total firearm sales in 2016.
Dividend
The company declared a fourth-quarter dividend of 44 cents per share, payable on Mar 31, 2017, to shareholders of record as of Mar 17. The dividend represents about 40% of the company’s net income.
Per management, dividend payouts vary every quarter as it is based on a percentage of earnings rather than a fixed amount.
Operational Highlights
Gross margin expanded 180 basis points (bps) to 33% at the end of 2016, compared with 31.2% at the end of 2015. Gross profit increased 27.5% to $219.6 million.
Total operating expenses rose 9.7% to $85.1 million in 2016 owing to higher selling, general and administrative expenses. Operating income was up 42.2% to $134.4 million from $94.5 million at 2015-end.
Sturm, Ruger’s earnings before interest, taxes, and depreciation and amortization (EBITDA) were $171.4 million, up 29.4%.
Financial Performance
The company ended 2016 with cash of $87.1 million, compared with $69.2 million at 2015-end.
Cash generated from operations was approximately $104.8 million in 2016, compared with $112.6 million a year ago. The current ratio is 2.8 to 1, with no outstanding debt.
Capital expenditure was $35 million at the end of 2016, up from $29 million a year ago. The company expects capital expenditure of about $40 million in 2017, as management continues to prioritize new product development.
Sturm, Ruger returned $33 million to its shareholders through dividend payments during 2016. Also, the company repurchased 0.3 million of its common stocks for $14 million.
Zacks Rank & Key Picks
Sturm, Ruger currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the same industry include Black Diamond, Inc. , Pool Corp. (POOL - Free Report) and Malibu Boats, Inc. (MBUU - Free Report) . While Black Diamond and Pool Corp sport a Zacks Rank #1 (Strong Buy), Malibu Boats carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Black Diamond surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 56.25%. It has a long-term earnings growth rate of 25.2%.
Pool Corp beat the Zacks Consensus Estimate in all of the trailing four quarters, the average positive surprise being 19.93%. It boasts a long-term earnings growth rate of 29.1%.
Malibu Boats topped the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 6.16%. It has a long-term earnings growth rate of 14.38%.
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In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
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Sturm, Ruger (RGR) Beats on Q4 Earnings; Expenses Rise
Leading publicly traded U.S. firearms maker, Sturm, Ruger & Company, Inc.’s (RGR - Free Report) fourth-quarter 2016 earnings of $1.10 per share surpassed the Zacks Consensus Estimate of 91 cents by 20.9%. Earnings also rose 25% from 88 cents earned in the year-ago quarter on higher sales.
For 2016, the company reported earnings of $4.59 per share, which exceeded the Zacks Consensus Estimate of $4.37 by 5%. The full-year earnings figure registered an improvement of 43% from the equivalent figure at 2015-end.
Sturm, Ruger & Company, Inc. Price and EPS Surprise
Sturm, Ruger & Company, Inc. Price and EPS Surprise | Sturm, Ruger & Company, Inc. Quote
Revenues
The company reported revenues of $161.8 million in the fourth quarter, up 6.2% from the prior-year figure of $152.4 million. The top line also comfortably surpassed the Zacks Consensus Estimate of $154 million. The upbeat performance can be attributed to elevated product sales across all segments.
In 2016, the company generated revenues worth $664.3 million, up 20.5% year over year. The top line also exceeded the Zacks Consensus Estimate of $656.5 million.
Firearm sales (comprising 99.1% of total sales) increased 20.8% while castings sales declined 5.6%. New product sales accounted for 29% of total firearm sales in 2016.
Dividend
The company declared a fourth-quarter dividend of 44 cents per share, payable on Mar 31, 2017, to shareholders of record as of Mar 17. The dividend represents about 40% of the company’s net income.
Per management, dividend payouts vary every quarter as it is based on a percentage of earnings rather than a fixed amount.
Operational Highlights
Gross margin expanded 180 basis points (bps) to 33% at the end of 2016, compared with 31.2% at the end of 2015. Gross profit increased 27.5% to $219.6 million.
Total operating expenses rose 9.7% to $85.1 million in 2016 owing to higher selling, general and administrative expenses. Operating income was up 42.2% to $134.4 million from $94.5 million at 2015-end.
Sturm, Ruger’s earnings before interest, taxes, and depreciation and amortization (EBITDA) were $171.4 million, up 29.4%.
Financial Performance
The company ended 2016 with cash of $87.1 million, compared with $69.2 million at 2015-end.
Cash generated from operations was approximately $104.8 million in 2016, compared with $112.6 million a year ago. The current ratio is 2.8 to 1, with no outstanding debt.
Capital expenditure was $35 million at the end of 2016, up from $29 million a year ago. The company expects capital expenditure of about $40 million in 2017, as management continues to prioritize new product development.
Sturm, Ruger returned $33 million to its shareholders through dividend payments during 2016. Also, the company repurchased 0.3 million of its common stocks for $14 million.
Zacks Rank & Key Picks
Sturm, Ruger currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the same industry include Black Diamond, Inc. , Pool Corp. (POOL - Free Report) and Malibu Boats, Inc. (MBUU - Free Report) . While Black Diamond and Pool Corp sport a Zacks Rank #1 (Strong Buy), Malibu Boats carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Black Diamond surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 56.25%. It has a long-term earnings growth rate of 25.2%.
Pool Corp beat the Zacks Consensus Estimate in all of the trailing four quarters, the average positive surprise being 19.93%. It boasts a long-term earnings growth rate of 29.1%.
Malibu Boats topped the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 6.16%. It has a long-term earnings growth rate of 14.38%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>