Smith & Wesson Holding Corporation (NASDAQ:SWHC) raised its full year outlook for 2013 after the company reported strong earnings for the second quarter. The company projected to achieve $550 to $560 million net sales and $1.00 to $1.05 earnings per diluted share for FY 2013. The gun manufacturer’s previous estimate was $530 to $540 million net sales and $0.85 to $0.90 earnings per diluted share.
During the second quarter, Smith & Wesson Holding Corporation (NASDAQ:SWHC) said its net income increased to $16.4 million or $0.24 per diluted share from $948,000 0r $0.01 per diluted share during the same period last year.
The gun manufacturer’s net sales climbed by 48 percent percent to $136.6 million, due to strong sales in all of its firearms products including M&P pistols, modern sporting rifles, and the newly launched Shield pistol designed for concealed carry and personal protection.
Smith & Wesson Holding Corporation (NASDAQ:SWHC) said its operating income was $26.6 million (19.5 percent of net sales), higher than the $3.4 million operating income last year.
James Debney, president and CEO of Smith & Wesson said "Our strong fiscal second quarter financial performance reflects the ongoing successful execution of our strategic plan… Increases in internal production capacity combined with improvements in our supply chain integration allowed us to offset the impact of the annual two-week shutdown as well as exceed our revenue and earnings guidance. As always, we engaged in product innovation and marketing activities designed to support and expand our user base.”
Benchmark analyst Ronald Bookbinder reiterated his “buy” and $13 per share price target for Smith & Wesson’s stock. He also increased his revenue & EPS estimates for FY2013 to $561 million and $1.05 per share.
On the other hand, Wedbush analysts Rommel Dionisio and Kurt Frederick believe that the robust demand for firearms will decline soon. The analysts noted that Smith & Wesson’s order backlog dropped from $392 million to $333 million. According to them, the figure showed that dealers who placed the orders do not expect the surge in demand for firearms will last longer. Their price target for the shares of Smith & Wesson remained $9 per share, and they recommended a neutral rating.
Sales of guns from companies such as Smith & Wesson and Sturm, Ruger & Company (NYSE:RGR), have surged since Barack Obama won the election in 2008. Gun sales have surged again when Barack Obama was re-elected last month. Concerns over possible new gun legislation from the Obama administration have driven sales (and stock prices of gun makers).
Smith & Wesson Holding Corporation (NASDAQ:SWHC)’s stock climbed in premarket trading today by 19 percent to $11.06 per share. At the time of this writing, the stock value of the company is down by nearly 7 percent to $10.11 per share.