Smith & Wesson reports 2Q loss

[imschur]

By The Associated PressSPRINGFIELD, Mass. (AP) — Gun maker Smith & Wesson Holding Corp. reported a fiscal second-quarter loss Wednesday as it sold fewer guns and recorded a charge for the falling value of a company it bought last year.

Its shares fell more than 7 percent in after-hours trading.

For the quarter that ended Oct. 31, Smith & Wesson reported a loss of $37.3 million, or 62 cents per share. That compares with a profit of $14.4 million, or 22 cents per share, a year earlier.

Its earnings beat the average expectation of analysts surveyed by Thomson Reuters for no improvement from a year ago, excluding one-time items. On that basis, the company earned 5 cents per share.

But the gun maker's revenue missed analyst expectations for $99.8 million. It fell 12.2 percent to $96.3 million from $109.7 million.

Smith & Wesson said revenue from its firearms division sank nearly 11 percent to $83.6 million, offset in part by a rise in sales of "personal protection handguns." Revenue from the company's perimeter security unit fell 22 percent to $12.8 million.

Smith & Wesson reported a $39.5 million impairment charge in relation to USR, which the company bought last year. Part of the drop in USR's value resulted from changes in government and corporate purchases of firearms.

For the third quarter, Smith & Wesson predicted revenue of $94 million to $99 million. Analysts were expecting $108.2 million.

For the full fiscal year, the company expects $405 million to $425 million in revenue. Analysts are hoping for $429.5 million.

Smith & Wesson shares dropped 30 cents, or 7.4 percent, to $3.75 in after-hours trading. The stock finished regular trading down 6 cents at $4.05.