Gun maker Smith & Wesson Holding Corp. boosts FY '08 revenue projections
On a Thursday evening earnings call, executives of Smith & Wesson Holding Corp. (NASDAQ: SWHC) increased the company’s guidance for fiscal year 2008. The 155-year-old gun manufacturer boosted its projections for fiscal 2008 to $330 million in revenue, or $0.62 per share, up from the previous guidance of $320 million in revenue, or $0.60 a share.
Wall Street analysts expect $321.3 million in revenue. Sporting goods, law enforcement and international sales will boost the next year’s revenue, CFO John Kelly said on the call.
The company reported revenue of $234.8 million for the fiscal year 2007, a 49% increase over 2006. The results were powered by a 59% increase in pistol sales.
“The year was highlighted by unprecedented sales increases in our traditional pistol and revolver market and it was crowned by our entry into the rifle and shotgun markets through both acquisition and organic growth,” CEO Michael Golden said.
Smith & Wesson is also targeting federal government sales, Golden said. The Senate armed forces committee recently completed the 2008 defense authorization bill, he said. In that bill, Golden said there is a provision that ensures American arms manufacturers will not be excluded from small arms competition for Iraq, Afghanistan, police, security and military forces.
“The federal government represents another significant sales channel and we’re proud to say we won the only four new pistol solicitations that have been generated by the U.S. military over the past two years,” Golden said.
Smith & Wesson did not include federal sales in its 2008 projections, Golden said, because “orders from this channel are not always predictable.” The company is taking the strategy of lobbying politicians, he said.
“We have included no significant revenue from the federal government channel in our current forecast,” Golden said. “However, we believe we are well-positioned to benefit from potential sales orders.”
After Thursday’s closing bell, Smith & Wesson reported record revenue of $82.6 million for the fourth quarter ended April 30, compared with $51.9 million in the same period a year ago. The company recorded a $52 million profit, or $0.12 per share, up from a $4.2 million profit, or $0.11 per share, a year earlier. Smith & Wesson beat analysts’ expectations of $72.8 million in revenue, or $0.10 per share.
“We are proud to deliver our tenth consecutive quarter of year-over-year sales growth,” Golden said. “We believe these milestones mark only the beginning of a very exciting future for Smith & Wesson.”
In Thursday’s trading, shares of Smith & Wesson were up $0.14, or 0.95%, at $14.91.
