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Sturm, Ruger (RGR) Q2 Earnings Up, Revenues Decline Y/Y

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Sturm, Ruger & Company, Inc.’s (RGR - Free Report) second-quarter 2018 earnings of 86 cents per share reflected an annual rise of 50.9% from 57 cents. The upside can be attributed to year-over-year increase in its gross profit as well as operating income.

Sales

In the quarter under review, the company’s net sales came in at $128.4 million, down 2.6% from the prior-year figure of $131.8 million. Lower production volumes led to the sales decline.

Firearm sales (comprising almost 99% of total sales) decreased 2.7% on a year-over-year basis, while castings sales improved 3.7%. New product sales accounted for 29% of total firearm sales in the first half of 2018. These included the Pistol Caliber Carbine, the Mark IV pistol, the LCP II pistol, the EC9s pistol, the Security-9 pistol and the Precision Rimfire Rifle.

Dividend

Sturm, Ruger declared a second-quarter dividend of 34 cents per share, payable on Aug 31, 2018, to shareholders of record as of Aug 17. The dividend represents about 40% of net income. This reflects an improvement of 6.25% from dividend of 32 cents per share, which the company paid in the first quarter of 2018.

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 increased 4.7% to $36.6 million in the reported quarter. Total operating expenses dropped 12.3% year over year to $17.23 million in the second quarter owing to lower selling expenses.

Consequently, operating income increased 26.6% to $19.37 million in the reported quarter from $15.3 million at the end of second-quarter 2017.

Sturm, Ruger’s earnings before interest, taxes, and depreciation and amortization (EBITDA) was $28.2 million, up 12.8% from 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

Financial Performance

The company ended second-quarter 2018 with cash of $131.7 million compared with $63.5 million at 2017-end.

Cash generated from operations was approximately $81 million compared with $39.9 million in the year-ago quarter. The current ratio is 3.3 to 1, without any outstanding debt.

Capital expenditures totaled $2 million at the end of second-quarter 2018.

Sturm, Ruger returned $6 million to shareholders through dividend payments during the second 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 Releases

Here are some companies from the Consumer Discretionary sector that recently released their respective quarterly results.

Pool Corporation’s (POOL - Free Report) second-quarter 2018 earnings of $2.80 per share in the quarter lagged the Zacks Consensus Estimate of $2.84 by 1.4%

Mohawk Industries (MHK - Free Report) second-quarter 2018 adjusted earnings per share (EPS) of $3.51 missed the Zacks Consensus Estimate of $3.88 by 9.5%

Dolby Laboratories (DLB - Free Report) reported third-quarter fiscal 2018 adjusted earnings of 92 cents per share, surpassing the Zacks Consensus Estimate of 82 cents.

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