Smith & Wesson Holding Corp (NASDAQ:SWHC) provided mixed earnings outlook for the full year as well as for the ongoing quarter. The firm isn’t optimistic about the earnings growth as in the fresh quarter earnings dropped 13% on higher expenses and weaker margins.
For the current fiscal year which ends in April 30, 2016, the firm projects adjusted profit of $1.02 to $1.07 a share and net revenue of $605 million to $615 million, somewhat close to the analysts’ forecasts of $1.07 per share in profit and $602 million in revenue, surveyed by Thomson Reuters.
Smith & Wesson estimates earnings, before some items, of 21 cents to 23 cents a share and overall revenue of $140 million to $145 million. While analysts’ polled by Thomson Reuters are more hopeful then the company’s projections. Analysts’ forecasted per-share profit of 25 cents and revenue of $145 million.
Springfield, Mass.-based firm’s sales of consumer handguns were returning back on track. The industry has seen strong demand of guns in recent years due to the fear of gun enthusiasts on speculation that federal regulators possibly increased scrutiny on buying firearms.
For the latest quarter ended in April 30, the firm posted income of $21.9 million, or 40 cents a share, below $25 million, or 44 cents a share the firm reported in a year earlier period. Earnings, excluding one-time items, from continuing operations dragged to 45 cents from 47 cents. Net revenue spiked 6.2%, to $181 million. That earnings report is somewhat similar to firm’s own projections in revenue and profit. The firm projected per-share earnings of 39 cents to 41 cents on revenue of $175 million.
The firm’s firearm unit’s net revenue slipped 2.4%, to $166.4 million.
The accessories segment’s revenue accounted for $14.6 million of the total revenue. The division was expanded by the addition of Battenfeld Technologies Inc, which was procured by the firm in December. Battenfeld expertise increases Smith & Wesson’s exposure in the hunting and shooting accessories market.
Gross margin dropped to 37.1% from 40.9%. Net operating costs eclipsed 12%.
