Sturm Ruger Q1 Profit Up 3%, Results Beat View

(RTTNews) - Firearms maker Sturm, Ruger & Co., Inc. (RGR) on Monday reported a 3 percent increase in profit for the first quarter from last year on higher sales that helped offset lower margins. Both revenue and earnings per share for the quarter beat analysts' estimates.

The Southport, Connecticut-based company's net income for the first quarter was $24.32 million or $1.22 per share, up from $23.72 million or $1.20 per share in the same period last year.

On average, three analysts polled by Thomson Reuters expected the company to earn $1.12 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 9 percent to $169.88 million from $155.91 million in the same period last year. Analysts had a consensus revenue estimate of $157.89 million.

Net firearms sales for the quarter grew 10 percent from the year-ago period to $169.16 million. New products represented $41.3 million, or 24 percent, of firearm sales in the quarter. Meanwhile, new castings sales fell 71 percent from the prior-year period to $722 thousand.

Gross margin for the quarter was 36 percent, compared to 39.3 percent in the prior-year period.

Operating margin declined to 22.3 percent from 23.8 percent in the year-ago quarter, primarily due to a product mix shift away from unusually strong sales of higher-margin firearms accessories recorded by the company a year ago. Additionally, increased depreciation expense affected operating margins.

The company's board of directors declared a dividend of $0.49 per share for the first quarter, for shareholders of record as of May 16, 2014 and payable on May 30, 2014.

RGR closed Monday's trading at $65.95, down $1.84 or 2.71 percent on a volume of 712,984 shares. However, in after-hours, the stock gained $1.84 or 2.79 percent to $67.79.