Smith & Wesson (SWHC) Stock Spikes Today on Earnings Beat

Smith & Wesson (SWHC) shares are up double digits after the company reported a strong third quarter and guided current quarter financial results above expectations.

Author:: Tony Owusu
Publish date:: Mar 4, 2015 10:27 AM EST

NEW YORK (TheStreet) -- Smith & Wesson (SWHC) shares are up 11.9% to $14.60 in early market trading on Wednesday after the firearms manufacturer released its third quarter earnings results after the closing bell yesterday.

The Springfield, MA-based company reported third quarter net income of $8.1 million, or 20 cents per diluted share when adjusted for one-time gains, on revenue of $130.6 million. Analysts on average were expecting the company to report earnings of 11 cents per share on revenue of $124.8 million.

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For the current quarter ending in April, the company forecast a jump in earnings to between 29 cents and 31 cents per share with revenue in the $162 million to $166 million range. Analysts on average are expecting the company to report earnings of 24 cents per diluted share on revenue of $161.8 million.

The company's shares rose over 10% in after-hours trading yesterday following the release of the numbers.

Smith & Wesson's firearms division reported a 14.7% year over year decline in firearm revenue to $124.5 million as long guns and sporting rifle sales continue to falter.

TheStreet Ratings team rates SMITH & WESSON HOLDING CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate SMITH & WESSON HOLDING CORP (SWHC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, solid stock price performance, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows: