Smith & Wesson Q4 Profit Down, Shares Plunge On Weak Outlook

(RTTNews) - Firearms maker Smith & Wesson Holding Corp. (SWHC), Thursday reported a slight drop in profit for the fourth quarter as revenues declined, but both earnings and revenues beat Wall Street estimates. Moving ahead, the company detailed a weak outlook for the first quarter and full year 2015, sending its shares down 11 percent in after-hours trade.

The Springfield, Massachusetts-based company' fourth-quarter profit dropped slightly to $25.1 million from $25.2 million last year. On a per share basis, net earnings were higher at $0.44 from last year's $0.38, due to a lower share count. Analysts polled by Thomson Reuters expected earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the fourth quarter dropped to $170.4 million from $178.7 million last year. Analysts estimated revenues of $163.55 million for the quarter. Excluding Walther products that were sold last year, net sales declined 1.5 percent, reflecting lower long gun sales.

Gross margins, or percentage of sales left after deducting production costs, advanced to 40.9 percent from 38.3 percent a year ago. Margins were driven largely by favorable product mix, absorption, and manufacturing efficiencies, as well as lower promotions and the absence of lower-margin Walther product sales

Looking forward to the first quarter, the company expects earnings from continuing operations of $0.23 to $0.25 per share on revenues of $130 million to $135 million. Analysts currently see earnings of $0.40 per share on revenues of $160.6 million.

For fiscal year 2015, the company projects earnings from continuing operations of $1.30 to $1.40 per share and revenues of $585 million to $600 million. Analysts currently expect earnings of $1.45 per share on revenues of $621.9 million.

SWHC closed Thursday's trading at $17.00, up $0.17 or 1.01%, on the Nasdaq. The stock, however, dropped $1.83 or 10.76% ,