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.
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%.
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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.
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>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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