Smith & Wesson (SWHC) Surges With Some Help From Obama

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Smith & Wesson (SWHC) Surges With Some Help From Obama

The shares of Smith & Wesson Holding Corp (SWHC)  are trading higher today after the gun manufacturer raised its earnings and sales guidance for the third-quarter ending on January 31 and full year 2016 ending on April 30, 2016.

The stock price of SWHC increased 12.50% to $26.19 per share at the time of this writing around 1:50 PM EST. The stock has been leading the rally among the equities of U.S. gun manufacturers ahead of the announcement of President Obama’s plans to prevent gun-related violence.

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SWHC earnings guidance

For the third quarter, SWHC expected to achieve earnings of around $0.39 to $0.41 per share compared with its previous estimate of around $0.27 to $0.19 per share. Wall Street analysts expected the company to report $0.29 per share.

The gun manufacturer expected its net sales for the period to be around $175 million to $180 million, up from its previous estimate of $150 million to $155 million. Analysts have a consensus estimate of $154.56 million.

For the full year 2016, Smith & Wesson expected to report earnings in the range of $1.36 to $1.41 per share, higher than its previous estimate of $1.26 to $1.31 per shares. Wall Street analysts expected the company to generate $1.32 in earnings per share.

The company estimated its 2016 net sales to be around $650 million $660 million compared with its previous expectation of around $625 million to $635 million. Analysts expected the company to report $636.48 million for its fiscal 2016.

SWHC raised its quarterly and full-year earnings and sales guidance after experience stronger-than-expected sell-through rates. The company also explained that the adjusted National Instant Criminal Background Check System (NICS) data in December showed strong growth compared with the NICS data from the same month a year ago.

Pres. Obama announces gun control measures

Pres. Obama announced his plan to expand background checks for almost every person who will purchase a gun from a dealer. The President also plans to implement an executive order that would change certain gun regulations.

“Everybody should have to abide by the same rules. Anybody in the business of selling firearms must get a license and conduct background checks or be subject to criminal prosecutions,” according to Pres. Obama.

The President emphasized that back checks “make a difference.” According to him, background checks will be expanded to cover those purchasing online, at gun shows, and other venues.

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Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.
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