Smith & Wesson Holding Corp (SWHC) Crushes Q1 Earnings

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Smith & Wesson Holding Corp (NASDAQ:SWHC) climbed higher in Thursday’s after-market trading on a Street-beating fiscal first quarter and great Q2 guidance. However, Wall Street seemed unsure about how to react; SWHC was wavering between 3% gains and fractional losses after rising 5% in regular-hours action.

SWHC stock Smith & Wesson earnings

Still, SWHC longs have plenty to crow about with this one.

Smith & Wesson’s net income shot up 126% year-over-year. After backing out certain items, profits came to 62 cents per share, trumping expectations by 9 cents. Revenues of $207 million were up 40% year-over-year and handily beat expectations for $198.16 million.

Second-quarter guidance was downright outstanding. Smith & Wesson sees earnings coming in around a range of 53 cents to 57 cents per share of SWHC stock on revenues of $220 million to $230 million. That was way ahead of consensus estimates for 35 cents per share on $165.4 million estimated.

Smith & Wesson stock dipped strongly on Wednesday — a not-atypical move for SWHC ahead of its quarterly reports. But SWHC put together a nice move today right before the report.

As we noted on Tuesday, background checks over the past few months were pointing toward strong results from Smith & Wesson. And wouldn’t you know it …

“We believe that higher revenue was driven by strong consumer demand as reflected in adjusted background checks from the National Instant Criminal Background Check System (NICS) as well as our own market share gains,” CEO James Debney said.

Part of the reason for the raised outlook was the timing of two acquisitions from the quarter. SWHC purchased Crimson Trace Corporation, a laser sighting and tactical lighting company that already acted as a supplier to Smith & Wesson, for $95 million. It also bought up Taylor Brands for $85 million. Taylor produces knives and other tools under the Schrade and Uncle Henry brand names, among others.

SWHC still trades at 14 times next year’s projected earnings, and an unsure gun control landscape isn’t going to become any more certain for at least a couple more months.

Regardless of how Smith & Wesson finally decides to move on Friday morning, SWHC stock still looks like a fantastic buy in the near-term.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/09/smith-wesson-holding-corp-swhc-stock-crushes-q1-earnings/.

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