Smith & Wesson Up As Analyst Predicts Sales Jump

NEW YORK (AP) — Shares of Smith & Wesson Holding Corp. got a boost Tuesday from an analysts' prediction the handgun manufacturer will report strong sales growth when it posts fiscal fourth-quarter results next Monday.

Wedbush Morgan analyst Rommel T. Dionisio said he expects revenue to jump 6 percent over the year-ago quarter, to $88 million, as the firearms industry sees "record-setting momentum."

FBI data shows the number of background firearm checks in February through April climbed 28 percent from last year. Dionisio said the company's fiscal third-quarter results showed a 26 percent sales increase after a similar jump in background checks.

"We believe the sharp acceleration in sales, which began in October 2008, largely reflects the belief that the election of a Democratic presidential administration could result in tightening of gun control laws," Dionisio wrote in a note to clients.

He said a key competitor, Sturm Ruger, reported a 55 percent increase in sales in its first quarter, while orders doubled and order backlog tripled. And for its March quarter, outdoor retailer Cabela's Inc. posted an 8.2 percent rise in same-store sales, or sales in stores open at least a year, due to the sale of firearms and related accessories.