The company reported a profit of $20.8 million, or 36 cents a share, compared to $14.6 million, or 22 cents a share, in the same period a year earlier. Earnings from continuing operations increased 14.6% to $20.1 million, or 35 cents a share.
Revenue rose 7.1% to $145.9 million. Gross margin widened to 40.2% versus 36.6% a year earlier.
Analysts expected per-share earnings of 29 cents on revenue of $142.7 million. Smith & Wesson forecasted earnings from continuing operations of 28 to 30 cents a share and between $140 million and $145 million in revenue.
Gun makers like Smith & Wesson widely reported a surge in sales last year, as the threat of additional regulations drove buyers to purchase firearms. In recent months, analysts have warned that demand will likely flatten.
Smith & Wesson said third-quarter revenue got a big lift from handgun sales, which grew 29.9% year-over-year amid demand for the company’s M&P pistols. CEO James Debney called the result “a solid result when we consider that the year-ago quarter reflected a surge in consumer demand.”
Excluding Walther products in the year-ago period, total sales were up 16.7%. Smith & Wesson phased out a distribution agreement with the German gun manufacturer last year.
Also on Tuesday, Smith & Wesson raised its full-year guidance to between $615 million and $620 million in sales and earnings from continuing operations of $1.39 to $1.42 a share. The Springfield, Mass.-based company expects to book per-share earnings of 37 to 40 cents and revenue of $159 million to $164 million.
In January, Smith & Wesson announced it will no longer sell many of its handguns in California, where a new law mandates the use of microstamping technology. The company said sales of California-compliant guns, including revolvers and handguns that were launched prior to the law taking effect, will more than offset any lost sales.
Shares of Smith & Wesson jumped 6.6% to $12.58 in after-hours trading. Through Tuesday’s close, the stock was down 12.5% since the start of the year.
Hat Tip: Fox Business