Leading firearm manufacturer,
Smith & Wesson Holding Corporation
) came out with preliminary numbers for the second quarter of
fiscal 2013, ending October 31, 2012.
STURM RUGER&CO (RGR): Free Stock Analysis
SMITH & WESSON (SWHC): Free Stock Analysis
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Earnings for the quarter are expected between 23 cents and 24
cents per share, substantially higher than 1 cent reported in the
year-ago period. Earnings are all set to surpass the prior
expected range of 19 cents to 21 cents.
With this the company is expected to surpass the Zacks Consensus
Estimate of 21 cents.
The expected total revenue for the quarter is $136 million
reflecting growth of 48% year over year. The top line is thereby
expected to supersede the guided range of $130 million to $135
The positive feelers for the second quarter came on the back of
order strength across all product lines. Particularly popular in
the quarter were M&P polymer pistols and M&P modern
The $136 million in revenues should be nominally higher than the
Zacks Consensus Estimate of $135 million.
Prior Quarter Recap
Smith & Wesson had reported adjusted earnings of 28 cents per
share in the first quarter of fiscal 2013, compared with 4 cents
per share in the year-ago quarter. The results of the company
were 55.5% higher than the Zacks Consensus Estimate of 18 cents.
The company reported net sales of $136 million in the relevant
quarter, up 48.3% from $91.7 million in the year-earlier period.
The year-over-year growth was driven by strong sales of the
M&P product platform. Net sales in the reported quarter
were higher than the Zacks Consensus forecast of $129 million.
The company continues to invest consistently in research and
development (R&D) activities to develop new products. In the
first quarter of fiscal 2013, the company spent $1.1 million on
R&D versus $1.3 million in the prior-year quarter.
Smith & Wesson sat on a firearm backlog of $392.4 million,
increasing 61% year over year from $243.6 million at the end of
the first quarter last year.
Smith & Wesson reiterated its top and bottom line expectation
for fiscal 2013. Total revenue for fiscal 2013 is expected in the
range of $530 million to $540 million, reflecting 30%
year-over-year growth. GAAP earnings per share in fiscal 2013 are
expected between 85 cents and 90 cents.
The guidance for fiscal 2013 provided by the company seems to be
on the conservative side. The company had already registered a
strong performance in the first half of the year and has a
healthy backlog of orders. We believe this trend will continue
for the latter part of fiscal 2013, given the rise in orders
across product lines.
Smith & Wesson retains a short-term Zacks #3 Rank (Hold
Sturm, Ruger & Company Inc
), another operator in this segment, presently has a short-term
Zacks #2 Rank (Buy rating).
Based in Springfield, Massachusetts, Smith & Wesson Holding
Corporation was founded in 1852. The company manufactures,
designs and supplies a large variety of fire arms and related
items to its worldwide customers. The company has 1,346 full time
employees and a market cap of $0.66 billion.