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What's in the Stores for Sturm, Ruger (RGR) in Q1 Earnings?
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Sturm, Ruger & Company (RGR - Free Report) is scheduled to release first-quarter 2018 results on May 8.
In the last reported quarter, the company reported a negative earnings surprise of 9.68%. Moreover, Sturm, Ruger missed the Zacks Consensus Estimate in three of the trailing four quarters, the average earnings miss being 11.63%.
Let’s see how things are shaping up for the company prior to this announcement.
Factors at Play
In 2017, Strum, Ruger suffered a 17% year-over-year decline in its estimated unit sell-through of its products from the independent wholesale distributors to retailers, owing to decreased overall consumer demand throughout the year. Moreover, reduced purchasing by retailers to lower inventories and generate cash as well as aggressive price discounting and enticing consumer rebates offered by competitors, along with increased industry manufacturing capacity, led to this lower unit sell-through. With no near-term improvement expected in these factors, we expect the company’s first-quarter 2018 results to reflect similar reduced unit sell-through.
On a bright note, according to the FBI's National Instant Criminal Background Check System (“NICS”), firearm background checks improved 6.3% year over year in first-quarter 2018, which shows growth in demand. This, in turn, is likely to boost sales of publicly traded gun manufacturers like Sturm Ruger.
Moreover, realizing that consumers’ preference is shifting toward concealed carry products and modern sporting rifles, Strum, Ruger shifted focus toward the development of commercial sporting products, which its management believes is the key driver of demand. To reap the benefits of the growing demand of sport rifles, in 2017, the company unveiled a range of products like the Mark IV pistols, Precision Rifle, the LCP II pistol and the American pistol. Per management, due to timing of their launches, these products had a little impact on 2017’s results. Therefore, we may expect these product innovations to boost the company’s firearm sales partially, beginning from first-quarter 2018.
Meanwhile, the Zacks Consensus Estimate for Strum, Ruger’s first-quarter earnings shows 42.2% year-over-year decline. The same for revenues is pegged at $117.3 million, implying 30% annual decline.
Sturm, Ruger & Company, Inc. Price and EPS Surprise
Our proven model does not show that Sturm, Ruger is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. Unfortunately, this is not the case here, as you will see below.
Zacks ESP: Sturm, Ruger has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 70 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Sturm, Ruger carries a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
MCBC Holdings, Inc. (MCFT - Free Report) is set to report quarterly results on May 10. The company has a Zacks Rank #3.
DOMETIC GP AB (DTCGF - Free Report) is expected to report quarterly results on May 7. The company carries a Zacks Rank #2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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What's in the Stores for Sturm, Ruger (RGR) in Q1 Earnings?
Sturm, Ruger & Company (RGR - Free Report) is scheduled to release first-quarter 2018 results on May 8.
In the last reported quarter, the company reported a negative earnings surprise of 9.68%. Moreover, Sturm, Ruger missed the Zacks Consensus Estimate in three of the trailing four quarters, the average earnings miss being 11.63%.
Let’s see how things are shaping up for the company prior to this announcement.
Factors at Play
In 2017, Strum, Ruger suffered a 17% year-over-year decline in its estimated unit sell-through of its products from the independent wholesale distributors to retailers, owing to decreased overall consumer demand throughout the year. Moreover, reduced purchasing by retailers to lower inventories and generate cash as well as aggressive price discounting and enticing consumer rebates offered by competitors, along with increased industry manufacturing capacity, led to this lower unit sell-through. With no near-term improvement expected in these factors, we expect the company’s first-quarter 2018 results to reflect similar reduced unit sell-through.
On a bright note, according to the FBI's National Instant Criminal Background Check System (“NICS”), firearm background checks improved 6.3% year over year in first-quarter 2018, which shows growth in demand. This, in turn, is likely to boost sales of publicly traded gun manufacturers like Sturm Ruger.
Moreover, realizing that consumers’ preference is shifting toward concealed carry products and modern sporting rifles, Strum, Ruger shifted focus toward the development of commercial sporting products, which its management believes is the key driver of demand. To reap the benefits of the growing demand of sport rifles, in 2017, the company unveiled a range of products like the Mark IV pistols, Precision Rifle, the LCP II pistol and the American pistol. Per management, due to timing of their launches, these products had a little impact on 2017’s results. Therefore, we may expect these product innovations to boost the company’s firearm sales partially, beginning from first-quarter 2018.
Meanwhile, the Zacks Consensus Estimate for Strum, Ruger’s first-quarter earnings shows 42.2% year-over-year decline. The same for revenues is pegged at $117.3 million, implying 30% annual decline.
Sturm, Ruger & Company, Inc. Price and EPS Surprise
Sturm, Ruger & Company, Inc. Price and EPS Surprise | Sturm, Ruger & Company, Inc. Quote
Earnings Whispers
Our proven model does not show that Sturm, Ruger is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. Unfortunately, this is not the case here, as you will see below.
Zacks ESP: Sturm, Ruger has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 70 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Sturm, Ruger carries a Zacks Rank #3, which increases the predictive power of ESP. However, an Earnings ESP of 0.00% makes surprise prediction difficult.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Upcoming Peer Releases
Pool Corporation (POOL - Free Report) is expected to report quarterly results on May 19. The company carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
MCBC Holdings, Inc. (MCFT - Free Report) is set to report quarterly results on May 10. The company has a Zacks Rank #3.
DOMETIC GP AB (DTCGF - Free Report) is expected to report quarterly results on May 7. The company carries a Zacks Rank #2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>