great earnings this quarter, yes. But their guidance was horrendous. Earnings down next quarter 50% and from 170 Million in revenue down to 122 million. The stock is (and should) be slaughtered on that bad news. I am an FFL dealer, and I can first hand tell you that the gun rush is over now. Sales are back to "normal." Not more gun or ammo shortages.
The guidence is misunderstood. It had everything to do with # of production days for the 2nd quarter. The daily earnings are UP.... The fact that their production is catching up to demand is GOOD... The improvement in ammo supplies is GREAT... Ammo shortages were a deterrent to gun sales.... Making ammunition more available will increase sport shooting and "new gun ownership" and that is great for S&W....this may all be misunderstood by people reading headlines. It's not being overlooked by the LBO community who is interested in buying "cash cows" that ate undervalued for whatever reason.
The quarter-to-quarter comparison is best year-to-year rather than consecutive quarters, as seasonality is a factor in sales (hunting season, christmas season for example). In fact, SWHC predicted slightly higher sales compared to the same quarter last year, and slightly lower profit. SWHC predicted annual sales and profits to increase about 6% next year. See details below from the earnings announcement, which are not horrendous guidance IMHO.
The company estimates net sales for the second quarter of fiscal 2014 to be between $135.0 million and $140.0 million and GAAP earnings per diluted share from continuing operations of between $0.20 and $0.22. It should be noted that the company ended its Walther distribution agreement at the end of fiscal 2013 and therefore the second quarter of fiscal 2014 will not contain Walther sales, which amounted to $9.7 million in the comparable quarter a year ago.
The company is increasing its previously issued full year fiscal 2014 revenue guidance and now anticipates net sales for fiscal 2014 of between $610.0 million and $620.0 million. The company expects GAAP earnings per diluted share from continuing operations of between $1.30 and $1.35 for fiscal 2014.
Im hunting down all the morons today. Quote the CC where you think guidance for Q2 was horrendous. Q2 was lowered for the simple fact that they have less production days. Nothing wrong with this business model You are stupid. Gun sales will continue to grow. You CANNOT base the sales after sandy hook and equate them to being the norm. They were artificially boosted sales due to political reasons. BUT that does not mean sales will not continue to grow!