Smith & Wesson Profit Tops View, Outlook Strong; Shares Up 8%

(RTTNews) - Firearms maker Smith & Wesson Holding Corp. (SWHC), Thursday reported an increase in profit for the fourth quarter, driven largely by growth in revenues and margins. Earnings for the quarter came in ahead of Wall Street estimates as did revenues.

Moving ahead, the company projected a strong outlook for the first quarter and the full-year 2017, sending its shares up by 8 percent in extended hours.

Springfield, Massachusetts-based Smith & Wesson's fourth-quarter profit rose to $35.6 million or $0.63 per share from $21.9 million or $0.40 per share last year.

Excluding items, adjusted earnings from continuing operations for the quarter rose to $0.66 per share from $0.45 per share a year ago. Analysts polled by Thomson Reuters expected earnings of $0.54 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Smith & Wesson, which other than its namesake brand, also sells M&P and Thompson/Center Arms, said sales for the fourth quarter rose to $221.1 million from $181.0 million a year ago. Analysts had a consensus revenue estimate of $214.55 million for the fourth quarter.

Firearm division sales increased by 22.4 percent, while accessories divisions sales rose by 19.8 percent.

Gross margin, or percentage of sales left after deducting production costs, advanced to 41.6 percent from 37.1 percent last year.

Looking forward to the first quarter, the company sees adjusted earnings of $0.49 to $0.53 per share and sales of $190 million to $200 million. Analysts currently expect earnings of $0.37 per share on revenues of $161.6 million for the first quarter.

For the fiscal year 2017, the company has forecast adjusted earnings of $1.83 to $1.93 per share and sales of $740million to $760 million. Analysts currently expect earnings of $1.66 per share on revenues of $732.29 million for 2017.

SWHC closed Thursday's trading at $21.75, up $0.27 or 1.26%, on the Nasdaq. The stock further rose $1.81 or 8.32% in the after-hours trade.