Leading firearm manufacturer, Smith & Wesson Holding Corporation ( SWHC - Snapshot Report ) came out with preliminary numbers for the second quarter of fiscal 2013, ending October 31, 2012.

Earnings for the quarter are expected between 23 cents and 24 cents per share, substantially higher than 1 cent reported in the year-ago period. Earnings are all set to surpass the prior expected range of 19 cents to 21 cents.

With this the company is expected to surpass the Zacks Consensus Estimate of 21 cents.

Total Revenue

The expected total revenue for the quarter is $136 million reflecting growth of 48% year over year. The top line is thereby expected to supersede the guided range of $130 million to $135 million.

The positive feelers for the second quarter came on the back of order strength across all product lines. Particularly popular in the quarter were M&P polymer pistols and M&P modern sporting rifles.

The $136 million in revenues should be nominally higher than the Zacks Consensus Estimate of $135 million.

Prior Quarter Recap

Smith & Wesson had reported adjusted earnings of 28 cents per share in the first quarter of fiscal 2013, compared with 4 cents per share in the year-ago quarter. The results of the company were 55.5% higher than the Zacks Consensus Estimate of 18 cents.

The company reported net sales of $136 million in the relevant quarter, up 48.3% from $91.7 million in the year-earlier period. The year-over-year growth was driven by strong sales of the M&P product platform. Net sales in the reported quarter were higher than the Zacks Consensus forecast of $129 million.

The company continues to invest consistently in research and development (R&D) activities to develop new products. In the first quarter of fiscal 2013, the company spent $1.1 million on R&D versus $1.3 million in the prior-year quarter.

Smith & Wesson sat on a firearm backlog of $392.4 million, increasing 61% year over year from $243.6 million at the end of the first quarter last year.

Guidance

Smith & Wesson reiterated its top and bottom line expectation for fiscal 2013. Total revenue for fiscal 2013 is expected in the range of $530 million to $540 million, reflecting 30% year-over-year growth. GAAP earnings per share in fiscal 2013 are expected between 85 cents and 90 cents.

Our View

The guidance for fiscal 2013 provided by the company seems to be on the conservative side. The company had already registered a strong performance in the first half of the year and has a healthy backlog of orders. We believe this trend will continue for the latter part of fiscal 2013, given the rise in orders across product lines.

Smith & Wesson retains a short-term Zacks #3 Rank (Hold rating). Sturm, Ruger & Company Inc. ( RGR - Snapshot Report ) , another operator in this segment, presently has a short-term Zacks #2 Rank (Buy rating).

Based in Springfield, Massachusetts, Smith & Wesson Holding Corporation was founded in 1852. The company manufactures, designs and supplies a large variety of fire arms and related items to its worldwide customers. The company has 1,346 full time employees and a market cap of $0.66 billion.