Smith & Wesson crushes earnings expectations, shares spike
Reuters/John Sommers II
The gunmaker posted $0.63 in adjusted earnings per share (EPS) for its fiscal fourth quarter, and revenues totaling $221 million.Analysts had estimated adjusted EPS of $0.54 and revenues totaling $214.6 million, according to Bloomberg.
The company's outlook for the full year was also better than expected.It sees full-year sales between $740 million and $760 million, beating the forecast for $732.3 million. Adjusted EPS is forecast at $1.83-$1.93 ($1.66 expected).
Smith & Wesson CEO James Debney said the company's firearms division, where sales jumped 22% year-over-year, benefited from strong consumer demand as it introduced new products.Smith & Wesson shares gained 7% on Monday, one day after the shooting at a gay club in Orlando that killed 49 people. Investors anticipated that calls for tougher gun-control laws would increase current demand for firearms and boost the company's sales.
President Barack Obama said the shooting was a reminder of how easy it was for mass shooters to obtain guns. Hillary Clinton, the presumptive Democratic presidential nominee, also called for more gun-control measures.
Smith & Wesson shares have fallen about 1% year-to-date. The stock rallied sharply through April and then pared the gains after the FBI reported lower than expected permit activity in March.
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