Ahead of the Bell: Smith & Wesson
NEW YORK (AP) — Shares of Smith & Wesson climbed 4 percent in premarket trading Friday after it projected that strong sales would propel it beyond Wall Street expectations for the fourth quarter.
Late Thursday the company said that, based on preliminary data, fiscal fourth-quarter revenue rose 38 percent to $179 million. Smith & Wesson also believes that earnings from continuing operations rose 63 percent, to 44 cents per share.
Analysts polled by FactSet had been looking for something closer to 40 cents per share on revenue of $170.6 million.
Benchmark Research said Friday that Smith & Wesson is focused on boosting capacity to satisfy increased demand for its firearms, which has been driven higher by fears that gun control legislation would be tightened following the massacre in Newtown, Mass.,
A gunman killed 20 children and six adults at the Sandy Hook Elementary School in December, exactly six months ago.
"We believe management is doing all it can to increase capacity, as fast as it can, through outsourcing," analyst Ronald Bookbinder wrote.
Bookbinder anticipates that the anticipation of new gun laws with give a sizeable boost to backlog. During the third quarter, order backlog was already the highest in Smith & Wesson's history, Bookbinder said, ahead of the fourth quarter when huge spikes in backlog are more traditional.
Bookbinder maintained a "Buy" rating and $13 price target.
Smith & Wesson Holdings Corp., based in Springfield, Mass., is scheduled to report quarterly earnings on June 25.
The company's stock gained 38 cents to $9.68 before the market open.
A representative for Smith & Wesson did not immediately respond to an email seeking comment.