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Sturm, Ruger & Co. Inc. Message Board

  • equity_360 equity_360 Feb 26, 2014 10:36 PM Flag

    Rgr lost 3.7 cents per share due to shortening depreciation periods..

    As a result, higher depreciation by $700,000. Together with a few other items the analysts could not have factored in, rgr actually met or beat estimates. Just stunning how the 'new investor' reacts to financial tabloidism. $8 trades by numbskulls. Well, the numbskulls are gone, the shorts will backfill tomorrow.

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    • equity_360 - When analysts estimate several different items that add up to "summary estimate", they typically underestimate some, while overestimating others. You might be correct in your analysis of why RGR missed estimates, however your analysis only looks at one side of that equation.

      • 1 Reply to vkncaa
      • Excellent point. On the CC the Fifer went out of his way to mention the factors that decreased EPS, but didn't talk at all of those things that came in ahead of target that BOOSTED EPS.

        Regarding increased depreciation expense. Let's be clear, on the call they said they did it based on a review of actual equipment life. Thus they have previously been OVERSTATING EPS due to underestimated depreciation.

        More realistic depreciation expense will cost them another $0.20 in 2015 and another $0.10 in 2016.

        Numbers don't distort, CEO's do.

        This is first CC where I've heard CEO Fifer talk at length about market conditions, especially how Jan 2014 sell through was below 2013 and more like 2012.. How about those closing comments...

        -- 2014 will be an interesting year. As we have seen during previous periods of volatile demand such as the cycle from 2009 through 2011, the overall market dynamics can make continuous growth every year, difficult to achieve. --

        For a guy who adamantly refuses to give forward guidance, do you think he's telegraphing anything???

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