Gun control fears push Sturm Ruger sales to record high
(Reuters) - Gunmaker Sturm Ruger & Co Inc (RGR.N) reported record quarterly sales after fears of new gun controls spurred demand, and the company said it was scouting for a third factory to boost production.
Shares of the company rose about 8 percent in extended trade.
Sales jumped about 39 percent to $155.9 million in the first quarter from a year earlier. It rose 10 percent from the fourth quarter.
Gun demand has been boosted in part by attempts to ban the sale of certain high capacity rifles and ammunition in the wake of the shootings at an elementary school in Newtown, Connecticut in December.
"Strong demand from consumers, coupled with the current political climate, resulted in unprecedented levels of orders from retailers to distributors ...," the company said in a regulatory filing.
Background checks for firearm sales, a measurement commonly used to gauge the firearm industry's performance, rose more than 28 percent year-on-year in March, data from the FBI's National Instant Criminal Background Check System showed. In February, it rose about 33 percent.
Backlog at December 31 totaled 1.5 million units and represented about nine months of production capacity at current build rates, the company said.
Net income rose to $23.7 million, or $1.20 per share, in the quarter ended March 30, from $15.5 million, or 79 cents per share, a year ago.
New products, including the LC380 and SR45 pistols, represented 35 percent of firearm sales in the quarter.
Analysts on average expected a profit of $1.01 per share on revenue of $131.7 million, according to Thomson Reuters I/B/E/S.
The company, which competes with Smith & Wesson Holding Corp (SWHC.O) and privately held Glock Inc and Taurus, raised its quarterly dividend by 21 percent to 49 cents per share.
Sturm Ruger shares were up about 7 percent at $52.34 in trading after the bell. They closed at $49.05 on the Nasdaq.
(This story is corrected in paragraph 10 in April 29 story to show that analysts' average estimate for first-quarter sales was $131.7 million, not $112.3 million)
(Reporting by Aditi Shrivastava in Bangalore; Editing by Sriraj Kalluvila)
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