Investing.com -- Smith & Wesson Holding Corporation (O:SWHC) increased its full-year guidance on Tuesday amid renewed calls for more stringent gun control measures in the U.S. in the wake of last week's mass shooting at a holiday party in San Bernardino, California that resulted in the death of 14 workers.
For the gun company's second quarter of fiscal year 2016, which ended in late-October, Smith & Wesson finished with revenue of $143.2 million during the three-month period, a spike of 32.1% on a year-over year basis. The results were driven by increased demand in orders for the company's SDVE polymer pistols, M&P shields, bodyguard pistols and a host of its longer weapons. Smith & Wesson also enjoyed strong gains in its accessories division, which recorded double-digit revenue growth and improved gross margin over the last 12 months.
In addition, Smith & Wesson unveiled a range of new products over the quarter including: the M&P shield with night sights and the Thompson/Center Strike muzzleloader, which it is set to showcase at the Shooting, Hunting and Outdoor Trade (SHOT) show next month in Las Vegas.
"The combined strength of our firearms and accessories divisions delivered results that exceeded our financial guidance for sales and net income, reflecting the successful implementation of our growth strategy," Smith & Wesson CEO James Debney said in a statement.
As a result, Smith & Wesson reported earnings of $12.5 million or 0.22 per share for the quarter, significantly above net profits of $5.1 million or 0.09 over the same quarter in 2014. Analysts expected the company to finish with revenue of $139 million or 0.20 per share.
"Our gross margin performance was strong in the second quarter, driven by the favorable impact of increased production volumes in our firearms division and by gross margins in our accessories division in excess of 50.0%," Smith & Wesson CFO Jeff Buchanan said. "For the first half of fiscal 2016, we generated $22.8 million in operating cash flow and $8.6 million in free cash flow despite our seasonal inventory build in preparation for the hunting and holiday shopping seasons."
Smith & Wesson's sales have jumped in recent years following a rash of public, mass-shootings, most notably one in December, 2012 at a Connecticut elementary school, where 20 children and six adult staff members were shot to death.
On Sunday evening, U.S. president Barack Obama urged Congress to pass a measure that would prevent people on the U.S. Terrorist Security Administration's (TSA) No-Fly List from being able to purchase a gun. In response, Republican presidential candidate Marco Rubio excoriated the proposed legislation in an interview with CNN for its potential to impinge on the Second Amendment rights of Americans.
"The majority of the people on the no-fly list are often times people that basically have the same name as someone else who doesn't belong on the list," Rubio told CNN. "These are every day Americans that have nothing to do with terrorism."
Smith & Wesson now expects to finish with annual revenues between $625 and $635 million, up from previous forecasts of $610 to $620 million.
In Tuesday's regular session, shares in Smith & Wesson reached an eight-year high before closing at 21.39, up 0.95 or 4.65%. Following the release of the company's quarterly results, the shares fell slightly by 0.28 or 1.31% to 21.11 in after-hours trading.