Another sharp decline in demand for firearms during the third quarter contributed to Sturm, Ruger & Co. experiencing a 47.7% plunge in net income to $4.8 million.

Diluted earnings were 27 cents, down from 52 cents a year ago. There were no earnings forecast from Zacks Investment Research.

Ruger released the report after the stock market closed Thursday. The share price fell as much as 12% in pre-market trading, which typically foreshadow early trading the next day.

The share price closed down $2.40, or by 5.1%, to $45.05 on Friday.

Christopher Killoy, Ruger’s chief executive, said in his prepared statement that “demand has remained soft throughout this year.”

Ruger reported firearms sales tumbled 17.3% to $94.1 million after falling 25.2% in the second quarter to $94.9 million.

The continuing soft demand for firearms is not surprising considering sales have slumped industry-wide since the Trump administration took office in January 2017 with a pro-gun policy that eased fears of heightened restrictions under a potential president Hillary Clinton.

By contrast, firearms sales surged in the months after President Barack Obama’s 2008 and 2012 victories out of some gun owners’ fears that Obama might pursue tighter firearms restrictions.

The National Instant Criminal Background Check System background checks declined 1% through the first three quarters of fiscal 2019.

Ruger reported a 24% decrease in sell-through of its firearms from independent distributors to retailers so far in 2019.

The company said the decrease reflects several factors that include: competitors offering special sales, promotions and payment terms; the loss of a primary distributor in June from declaring bankruptcy; increased sales of used firearms at retail; and retailers reducing their inventory levels.

Killoy stressed that Ruger’s management and board of directors remain firm on a long-term focus on the company’s finances, “foregoing opportunities to generate better short-term results with overly aggressive discounting and promotions and the extension of payment terms, which would hinder our long term performance, value and brand.”

Instead, Killoy said Ruger “took the fiscally prudent measure of reducing production for the third consecutive quarter to moderate inventory levels in our warehouses and in the distribution channel.”

One ripple effect from the sales decline has been Ruger eliminating at least 930 jobs, or about 37% of its workforce, since Jan. 1, 2017.

Ruger has a major production plant in Mayodan, with 315 employees at last count. Its headquarters is in Southport, Conn., along with production operations in Earth City, Mo., Newport, N.H., and Prescott, Ariz.

The company reported having 1,830 full-time employees as of Feb. 1, as disclosed in its fiscal 2018 report.

On Friday, Ruger told analysts it had about 1,600 employees.

Killoy told analysts that in response to the reduced production in the third quarter, "we were proactive in managing our workforce as we kept the hiring freeze in place and allowed attrition to reduce our workforce, reduced overtime and took two additional shut down days in the third quarter on top of our normal scheduled shut down week in July."

"We believe that this disciplined approach, which adversely impacted our quarterly financial results, will pay dividends in the long run."

Killoy added that "we've been hiring (production workers) all along in our Maiden and we recently started hiring back in the New Hampshire facility."

Tony Plath, a retired finance professor at UNC Charlotte, has said it is likely the firearms sales slump will continue well into 2020.

“What happens in 2021 depends on whom we put in the White House next fall,” Plath said, “If we re-elect Trump, demand for guns stays weak through 2024.

“If we elect Joe Biden, a moderate Democrat, demand will strengthen somewhat. If we elect progressives Sen. Kamala Harris (D-Calif.), Elizabeth Warren (D-Mass.) or Bernie Sanders (I-Vt.), gun demand will soar in early 2021.”

Analysts with Zacks Equity Research analysts have said Ruger has been able to offset some of the firearms-sales decline by shifting its production focus toward concealed-carry products and modern sporting rifles.

These products, such as the Wrangler, Pistol Caliber carbine, EC9 pistol, Precision Rimfire Rifle and Security-9 pistol, represented 23% of firearm sales, or 70.6 million, for fiscal 2019 to date.

The board of directors declared a quarterly dividend of 11 cents, payable Nov. 27 to shareholders registered as of Nov. 15. The dividend typically represents 40% of the quarterly net income.

Ruger spent just under $2 million on repurchasing 44,500 of its shares during the third quarter.

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