Smith & Wesson (SWHC) shoots its eye out

Smith & Wesson Holding Corporation (Public, NASDAQ:SWHC) stock fell 38% today and is now just $3 from a new 52-week low.  Shares are now at $12, no where near the $20 price it was trading at a few hours ago.  Smith & Wesson are expecting a weak Q2 07 and reduced their 2007 outlook.  Needless to say, Ralphie isn't happy.

Smith & Wesson expects to report earnings of 5 cents per share to 7 cents per share for the second fiscal quarter ending Oct. 31, compared with earnings of 7 cents per share in the comparable year-ago period. The company expects revenue to grow by 36 percent to 40 percent, to a range of $69 million to $71 million. Too bad Thomson Financial expected earnings of 12 cents per share on revenue of $82.4 million.

Considering the stock has ran up nearly 200% in the last two years it was bound to take a dive on any bad news, well, the bad news is in.

Smith & Wesson lowered its full-year profit guidance to $23.5 million, or 53 cents per share, from a previous outlook of $28.5 million, or 63 cents per share. The company expects full-year revenue of $325 million, versus a previous outlook of $330 million.  Analysts polled by Thomson Financial expected full-year earnings of 64 cents per share on revenue of $334.9 million, on average.

Current guidance represents a 81 percent increase in profit and a 38 percent increase in revenue, Smith & Wesson said.

Results in the second quarter were hurt by "softness in the market for hunting rifles and shotguns, driven by lower than expected consumer demand, a buildup of pre-season retail inventories, and unseasonably warm autumn weather, which decreased retail traffic and compressed the fall hunting season," Chief Executive Michael Golden said in a statement.

Smith & Wesson has been around since the dawn of time and the Masters believe their brand and ties to U.S. Law Enforcement make the current share price a good entry point.  We are going to wait it out and watch for a new 52-week low, just wait for the analysts to start slamming the stock and down it goes even further. 

Article written by Ted Gottsegen 

Contributor at TheStockMasters.com

Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication.

 

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