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Sturm, Ruger (RGR) Q1 Earnings Down Y/Y, Sales Top Estimates

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Sturm, Ruger & Company, Inc.’s (RGR - Free Report) first-quarter 2018 earnings of 81 cents per share reflected an annual decline of 33.1% from the year-ago quarter’s figure of $1.21. The downside can be attributed to year-over-year decline in sales and operating income.

Sales

In the quarter under review, the company’s net sales came in at $131.2 million, down 21.6% from the prior-year figure of $167.4 million. However, the top line comfortably surpassed the Zacks Consensus Estimate of $117 million by 12.1%. Lower production volumes led to the year-over-year decline in sales.

Firearm sales (comprising 99% of total sales) decreased 21.9% on a year-over-year basis, while castings sales improved 28.9%. New product sales accounted for 29% of total firearm sales in the first quarter compared with 25% in the year-ago quarter.

 

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

 

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

 

Dividend

Sturm, Ruger declared a first-quarter dividend of 32 cents per share, payable on Jun 1, 2018, to shareholders of record as of May 22. The dividend represents about 40% of net income. This reflects an improvement of 39.1% from dividend of 23 cents per share, which the company paid in the fourth quarter of 2017.

Per management, dividend payout varies every quarter as it is based on a percentage of earnings rather than a fixed amount.

Operational Highlights

Gross profit decreased 35.8% to $35.8 million in the reported quarter. Gross margin contracted 60 basis points (bps) to 27.3% at the end of first-quarter 2018 compared with 33.3% at the end of first-quarter 2017.

Total operating expenses dropped 21.3% year over year to $17.2 million in first quarter owing to lower selling expenses. Operating income also declined 45.1% to $18.6 million from $33.9 million at the end of first-quarter 2017.

Sturm, Ruger’s earnings before interest, taxes, and depreciation and amortization was $27.1 million, down 37.8%.

Financial Performance

The company ended first-quarter 2018 with cash of $103 million compared with $63.5 million at 2017-end.

Cash generated from operations was approximately $45.3 million compared with $18.9 million in the year-ago quarter. The current ratio is 3.0 to 1, with no outstanding debt.

Capital expenditures totaled $1 million at the end of first-quarter 2018, down from $7.5 million in the prior-year quarter. For 2018, the company continues to expect capital expenditures of about $15 million.

Sturm, Ruger returned $4 million to shareholders through dividend payments during the first quarter.

Zacks Rank

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

Recent Peer Releases

Pool Corporation’s (POOL - Free Report) first-quarter 2018 earnings of 75 cents per share surpassed the Zacks Consensus Estimate of 70 cents by 7.1%.

Clarus Corporation’s (CLAR - Free Report) first-quarter 2018 earnings of 13 cents per share missed the Zacks Consensus Estimate of 16 cents by 18.8%.

Malibu Boats, Inc. (MBUU - Free Report) first-quarter 2018 earnings of 89 cents per share outpaced the Zacks Consensus Estimate of 71 cents by 25.4%.

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