Bloomberg News

Smith & Wesson Surges Most Since 2012 as Profit Beats Estimates

March 05, 2014

Smith & Wesson Holding Corp. (SWHC:US) surged the most in almost 18 months after the company’s fiscal third-quarter profit exceeded analysts’ estimates and it raised its earnings forecast for the full year.

The shares climbed 16 percent to $13.70 at 10:07 a.m. in New York, the biggest intraday increase since September 2012. The stock earlier climbed as much as 21 percent.

Earnings per share in the quarter ended Jan. 31, rose 35 percent to 35 cents, the Springfield, Massachusetts company said in a statement yesterday. That beat the 29 cent average estimate (SWHC:US) of eight analysts in a Bloomberg survey. The company said it estimates full-year earnings per share of between $1.39 and $1.42, increasing its previous estimate of between $1.30 and $1.35.

Sales of handguns, which include the company’s popular M&P pistols, grew 30 percent as the company sought to increase market share, Chief Executive Officer James Debney said in a conference call yesterday. Total revenue grew 7 percent to $145.9 million, surpassing estimates of 142.9 million. Income from continuing operations rose to $20.1 million from $17.5 million.

Smith & Wesson’s new products helped offset weakening demand for firearms after enthusiasts stockpiled guns last year amid concern that President Barack Obama’s administration would seek tighter gun control regulations, Rommel Dionisio, an analyst with Wedbush Securities in New York, said in an interview before the earnings announcement. He rates the stock neutral.

“In the industry, successful products help drive market share gains,” he said.

Cai von Rumohr, an analyst with Cowen Securities LLC, called the results “impressive,” and raised his rating on the stock to outperform today.

To contact the reporter on this story: J. Kyle O’Donnell in New York at jodonnell49@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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Companies Mentioned

  • SWHC
    (Smith & Wesson Holding Corp)
    • $9.69 USD
    • 0.13
    • 1.34%
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