Largest US gunmaker: Hillary Clinton 'campaigning against lawful commerce'

https://www.theguardian.com/us-news/2016/aug/03/sturm-ruger-gun-sales-hillary-clinton

Version 0 of 1.

Hillary Clinton is “actively campaigning against the lawful commerce in arms”, the chief executive officer of the America’s largest gun manufacturer said on Wednesday.

Discussing Sturm Ruger’s second-quarter earnings, CEO Michael Fifer was asked whether Clinton’s presidential campaign had anything to do with a rising demand. Background checks for gun sales have reached record levels following a series of mass shootings and Clinton’s calls for restrictions on firearm sales.

Fifer said Sturm Ruger had no way of measuring political impact or assigning it to any one politician’s comment. “But certainly this is a unique time in our history because for the first time ever we have a nominee of a major political party, one with a very real likelihood of winning the presidency, overtly stating that the supreme court got it wrong in the Heller case and actively campaigning against the lawful commerce in arms,” he said.

In 2008, the US supreme court overturned the District of Columbia’s ban on handguns when it ruled in a 5-4 vote that Americans have a constitutional right to keep a handgun at home for self-defense. The case, District of Columbia v Heller, involved a security guard, Dick Anthony Heller, who carried a gun while on duty but was denied a license to keep it at home.

Earlier this year, the Clinton campaign told Bloomberg that the Heller case was “wrongly decided” and that “cities and states should have the power to craft commonsense laws to keep their residents safe, like safe storage laws to prevent toddlers from accessing guns”.

Fifer said Clinton’s opposition to the Heller ruling was “unprecedented and it will be hard for any of us to believe that didn’t have some impact on sales”.

Like its rival Smith & Wesson, Sturm Ruger has benefited from a huge rise in gun sales under the Obama administration. Share prices in both companies are close to record highs and have peaked after each mass shooting as gun owners worry that new rules will restrict ownership.

In the three months ending 30 June, Sturm Ruger’s net firearm sales surpassed $166m. That’s $27m more in sales than the same period last year. Combined firearm and casting sales for the second quarter jumped 19% to $168m.

Profits for the first six months of the year was up almost 30% compared to the same period last year. By 30 June, Sturm Ruger had made $115.8m in gross profit, compared to $89.9m last year.

The spike in sales was attributed to increased demand for guns.

The quarter ending on 30 June also reflects sales of firearms in the aftermath of the Orlando shooting at the Pulse nightclub. Forty-nine people were killed that night. The impact of the shooting on gun sales “is something we can’t measure”, said Fifer.

“It didn’t appear to have a material impact on our distributors,” he added. “They got some calls the next day, but it quickly died down.”

One way the gun industry measures demand for guns in the market is by looking at the firearm background checks performed by the FBI. July was the 15th month in a row that such background checks reached a new record high for that time of the year. This July, the FBI processed 2,197,169 firearm background checks, up from 1,600,832 last year.

Background checks are not the most accurate way to predict gun sales, as not every background check results in a sale and multiple guns can be purchased with one background check.

After the FBI released the July figures on Monday, shares of Smith & Wesson traded at an all-time high of $30.59 a share and closed the day at $30.36. Sturm Ruger also saw a boost from the figures and closed ending the day up 2%, at $69.40.

On Wednesday, after reporting its quarterly results, Sturm Ruger opened at $68.67 a share. Within the first ten minutes of trading, the shares dropped 6%.

The drop in stock value could be attributed to the company’s announcement that Fifer will be retiring in 2017 at the next shareholder meeting. He will be succeeded by chief operating officer Christopher Killoy.

Smith & Wesson is expected to report its earnings on 1 September. This will be the company’s first earnings report since it acquired Crimson Trace, which specializes in laser sighting systems, and Taylor Brands, a designer and distributor of knives.