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Smith & Wesson (SWHC) Beats Q1 Earnings, Issues Outlook
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Smith & Wesson Holding Corporation reported financial results for first-quarter fiscal 2017 ended Jul 31, 2016. The company’s adjusted earnings per share of 62 cents surpassed the Zacks Consensus Estimate of 53 cents by 17%. Reported earnings also surged 93.8% from the year-ago level of 32 cents.
In the fiscal first quarter, Smith & Wesson’s total sales were $207 million, beating the Zacks Consensus Estimate of $197 million by 5.1%. Revenues were also up 40.1% from $147.8 million in the year-ago quarter.
The upside was driven by strong customer demand as revealed by the adjusted background checks of the National Instant Criminal Background Check System (NICS) and the company's own market share gains.
Operational Highlights
Total operating income during the quarter was $52.5 million, up 76.2% from $29.8 million in the year-ago quarter.
Gross margin for the quarter was 42.3% compared with 39.9%, in first-quarter fiscal 2016. The upside was mainly driven by increased production volumes at the firearms segment.
Smith & Wesson’s total operating expense was $35.0 million, up 20.6% from $29.1 million in the year-ago quarter. The upside was driven by general and administrative expenses (up 35.9%), partially offset by a decline in research and development (10.2%), and selling and marketing expenses (0.3%).
As of Jul 31, 2016, Smith & Wesson’s cash and cash equivalents were $215.0 million, compared with $191.3 million as of Apr 30, 2016.
Notes payable (net) was $165.2 million as of Jul 31, 2016, down from $166.6 million as of Apr 30, 2016.
Cash from operating activities in the first quarter was $38.1 million, compared with $16.6 million a year ago.
Guidance
The company expects second-quarter fiscal 2017 non-GAAP earnings in the range of 53–57 cents per share on revenues of $220–$230million.
For the full fiscal year, the company expects non-GAAP earnings of $2.38–$2.48 per share on revenues of $900–$920 million.
Peer Releases
TASER International Inc.’s second-quarter 2016 earnings came in at 7 cents per share, beating the Zacks Consensus Estimate of 3 cents by 133.3%. This Scottsdale, AZ-based company’s earnings were, however, down 36.4% year over year. The downside was mainly due to higher operating expenses.
Sturm, Ruger & Company’s (RGR - Free Report) second-quarter 2016 earnings came in at $1.22 per share, up 34% from 91 cents in the year-ago quarter. The upside was mainly attributable to higher sales.
Vista Outdoor Inc.’s (VSTO - Free Report) first-quarter fiscal 2017 earnings came in at 48 cents per share, missing the Zacks Consensus Estimate of 68 cents by 29.4%. The company’s earnings were also down 12.5% year over year.
Zacks Rank
Smith & Wesson currently sports a Zacks Rank #1 (Strong Buy).
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Smith & Wesson (SWHC) Beats Q1 Earnings, Issues Outlook
Smith & Wesson Holding Corporation reported financial results for first-quarter fiscal 2017 ended Jul 31, 2016. The company’s adjusted earnings per share of 62 cents surpassed the Zacks Consensus Estimate of 53 cents by 17%. Reported earnings also surged 93.8% from the year-ago level of 32 cents.
SMITH & WESSON Price, Consensus and EPS Surprise
SMITH & WESSON Price, Consensus and EPS Surprise | SMITH & WESSON Quote
Revenues
In the fiscal first quarter, Smith & Wesson’s total sales were $207 million, beating the Zacks Consensus Estimate of $197 million by 5.1%. Revenues were also up 40.1% from $147.8 million in the year-ago quarter.
The upside was driven by strong customer demand as revealed by the adjusted background checks of the National Instant Criminal Background Check System (NICS) and the company's own market share gains.
Operational Highlights
Total operating income during the quarter was $52.5 million, up 76.2% from $29.8 million in the year-ago quarter.
Gross margin for the quarter was 42.3% compared with 39.9%, in first-quarter fiscal 2016. The upside was mainly driven by increased production volumes at the firearms segment.
Smith & Wesson’s total operating expense was $35.0 million, up 20.6% from $29.1 million in the year-ago quarter. The upside was driven by general and administrative expenses (up 35.9%), partially offset by a decline in research and development (10.2%), and selling and marketing expenses (0.3%).
SMITH & WESSON Price, Consensus and EPS Surprise
SMITH & WESSON Price, Consensus and EPS Surprise | SMITH & WESSON Quote
Financial Condition
As of Jul 31, 2016, Smith & Wesson’s cash and cash equivalents were $215.0 million, compared with $191.3 million as of Apr 30, 2016.
Notes payable (net) was $165.2 million as of Jul 31, 2016, down from $166.6 million as of Apr 30, 2016.
Cash from operating activities in the first quarter was $38.1 million, compared with $16.6 million a year ago.
Guidance
The company expects second-quarter fiscal 2017 non-GAAP earnings in the range of 53–57 cents per share on revenues of $220–$230million.
For the full fiscal year, the company expects non-GAAP earnings of $2.38–$2.48 per share on revenues of $900–$920 million.
Peer Releases
TASER International Inc.’s second-quarter 2016 earnings came in at 7 cents per share, beating the Zacks Consensus Estimate of 3 cents by 133.3%. This Scottsdale, AZ-based company’s earnings were, however, down 36.4% year over year. The downside was mainly due to higher operating expenses.
Sturm, Ruger & Company’s (RGR - Free Report) second-quarter 2016 earnings came in at $1.22 per share, up 34% from 91 cents in the year-ago quarter. The upside was mainly attributable to higher sales.
Vista Outdoor Inc.’s (VSTO - Free Report) first-quarter fiscal 2017 earnings came in at 48 cents per share, missing the Zacks Consensus Estimate of 68 cents by 29.4%. The company’s earnings were also down 12.5% year over year.
Zacks Rank
Smith & Wesson currently sports a Zacks Rank #1 (Strong Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>