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Smith & Wesson Stock Drops on Revenue Miss; Earnings Top Estimates

Smith & Wesson reported a fifth consecutive quarter of record revenue, but missed analyst estimates.
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Shares of gunmaker Smith & Wesson  (SWBI) - Get Smith & Wesson Brands Inc Report dropped sharply after hours Wednesday after the company reported first-quarter revenue below estimates while topping earnings expectations.

The Springfield, Mass.-based company reported first-quarter non-GAAP net income of $77.1 million, or $1.57 per share, on revenue of $274.6 million

Analysts were expecting the gun manufacturer to report first-quarter earnings of $1.26 per share on revenue of $278.6 million, according to FactSet. 

"We believe we are well positioned for the ever-changing market conditions in our industry, to maintain our leadership position in the industry, and continue delivering impressive profitability in any environment,"  CEO Mark Smith said. 

The company said its revenue for the quarter marked the fifth consecutive quarter for top-line results. 

Despite the revenue miss, the company's gross margin improved to 47.3% from 40.2% a year ago. 

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However, shares on Wednesday were down 2.77% to $24.19 after hours at last check. 

Also weighing on the stock could be a school shooting at a Winston-Salem, N.C, high school Wednesday afternoon that injured one student. 

The shooting renewed calls for stricter gun laws on social media. 

Over 70% of the company's revenue comes from handguns, while long guns account for about 24% of sales annually. 

In the previous quarter, the company reported a 67% jump in sales driven by a surge in demand for firearms following the election of President Joe Biden. 

Democrats are traditionally seen as being more stringent on gun control and sales often rise.