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Sturm, Ruger (RGR) Beats on Q1 Earnings, Revenues Down Y/Y

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Leading publicly traded U.S. firearms maker, Sturm, Ruger & Company, Inc.’s (RGR - Free Report) first-quarter 2017 earnings of $1.21 per share surpassed the Zacks Consensus Estimate of 98 cents by 23.5%. Earnings were in line with the year-ago figure.

Revenues

The company reported revenues of $167.4 million in the first quarter, down 3.3% from the prior-year figure of $173.1 million. The top line surpassed the Zacks Consensus Estimate of $162 million by 3.3%.

The deterioration in year-over-year performance can be attributed to lower firearm and casting sales.

Firearm sales (comprising 99.4% of total sales) declined 3% and castings sales fell 37.7%. New product sales accounted for 25% of total firearm sales in the first quarter.

Dividend & Share Repurchase

Sturm, Ruger declared a first-quarter dividend of 48 cents per share, payable on May 31, 2017, to shareholders of record as of May 19. 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.

The company’s Board of Directors expanded its authorization to repurchase shares of its common stock to $100 million.

Operational Highlights

Gross profit declined 5.7% to $55.8 million from $59.1 million in the year-ago quarter.

Total operating expenses fell 4.5% to $21.9 million in the first quarter owing to lower selling expenses. Operating income was down 6.4% to $33.9 million from $36.2 million in the first quarter of 2016.

Sturm, Ruger’s earnings before interest, taxes, and depreciation and amortization (EBITDA) in the first quarter was $43.6 million, down 2.7%.

Sturm, Ruger & Company, Inc. Price, Consensus and EPS Surprise

 

Sturm, Ruger & Company, Inc. Price, Consensus and EPS Surprise | Sturm, Ruger & Company, Inc. Quote

Financial Performance

Sturm, Ruger ended the first quarter with $35.1 million cash, compared with $87.1 million at 2016-end.

Cash generated from operations was approximately $18.9 million in the first quarter, compared with $29.4 million a year ago. The current ratio is 2.2 to 1, with no outstanding debt.

Capital expenditure was $7.5 million at the end of the first quarter. The company expects capital expenditure of about $40 million in 2017, as management continues to prioritize new product development.

Sturm, Ruger returned $7.8 million to its shareholders through dividend payments during the first quarter. Also, the company repurchased 1.1 million of its common stocks for $53.4 million.

Peer Releases

Black Diamond, Inc. reported first-quarter adjusted earnings of 2 cents per share, beating the Zacks Consensus Estimate of breakeven earnings.

Pool Corporation’s (POOL - Free Report) first quarter earnings of 40 cents per share surpassed the Zacks Consensus Estimate of 39 cents by 2.6%. Meanwhile, the figure rose 5.3% on a year-over-year basis.

Malibu Boats, Inc. (MBUU - Free Report) reported fiscal third-quarter 2017 adjusted earnings of 49 cents per share, beating the Zacks Consensus Estimate of 46 cents by 6.5%.

Zacks Rank

Sturm, Ruger currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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