Smith & Wesson (SWHC, Financial) released its second-quarter earnings for fiscal 2017 on Thursday.
The well-known gun manufacturer reported an increase in profits and revenue. For the quarter, it reported a profit of $32.5 million, or 57 cents per share, up from $12.5 million, or 22 cents per share, a year earlier. The company reported revenue between $230 million and $240 million. Analysts forecasted $237.7 million. Sales climbed 63% to $233.5 million.
For the year, Smith & Wesson expects adjusted earnings between $2.42 and $2.47, compared to the previously anticipated $2.38 to $2.48. It also boosted its revenue expectation range to between $920 million and $930 million. It was previously $900 million to $920 million.
Despite the overall strong results, the stock is down nearly 15% since the election. Because Donald Trump won the presidential election on Nov. 8, consumers are less apprehensive that firearms will become harder to obtain due to the Republican Party’s continued support of the Second Amendment. Had Hillary Clinton been victorious, consumers would likely have shown an increased interest in purchasing firearms due to her support of stricter gun control laws.
The FBI reported the number of background checks for firearms sold in November was 2.56 million, a slight increase from 2.24 million a year earlier.
“Our retailer checks suggest buying patterns were changed little by the election result, although some sources indicate overbuying by smaller, newer distributors in anticipation of a Clinton win,” said analysts at Cowen & Co.
During the third quarter, guru Joel Greenblatt (Trades, Portfolio) increased his position in Smith & Wesson by 93.2%. Paul Tudor Jones (Trades, Portfolio), Chuck Royce (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio) reduced their positions while Steven Cohen (Trades, Portfolio) sold out.
Smith and Wesson announced in early November its name will be changing to American Outdoor Brands Corp. in 2017 to better reflect its various products. However, its popular firearms will continue to bear the name of Smith & Wesson.
The stock was trading at $21.58 on Friday.
Disclosure: I do not own stock in the company mentioned in the article.
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