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Late Wednesday, Smith & Wesson Holding Corp. (NASDAQ: SWHC) stepped into the earnings spotlight to release its fiscal first-quarter results. The firearm firm raked in a profit of $12.6 million, or 21 cents per share, sharply higher from its year-ago earnings of $2.3 million, or 5 cents per share. Revenue for the period jumped 30% to $102.2 million, buoyed by a 30% increase in firearm sales and a 39% gain in non-firearm sales.
The results soared past analysts' expectations, which called for a fiscal first-quarter profit of 10 cents per share on $94.1 million in revenue. SWHC's bottom line received a boost of 5 cents per share during the recently concluded quarter from its acquisition of Universal Safety Response Inc.
Looking ahead, SWHC expects to continue topping Wall Street's predictions: the firm is looking for second-quarter revenue of $103 million to $105 million, compared to analysts' current consensus estimate of $97.7 million.
Shares of Smith & Wesson bolted to a gain of more than 13% out of the gate this morning as investors cheered the report. The stock has now convincingly broken out above short-term resistance at its 10-day and 20-day moving averages, which acted as a steadily descending ceiling since late July.
Shorts could be feeling the squeeze today, with nearly 8% of SWHC's float sold short. At the stock's average daily trading volume, it would take nearly five sessions for all of these bearish bets to be covered.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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