Investing.com -- Shares in Smith & Wesson Holding Corporation (NASDAQ:SWHC) surged more than 5% on Thursday, after the prominent gun maker topped revenue and earnings forecasts last quarter in the wake of terrorist attacks in Paris and San Bernardino.
Smith & Wesson, a Springfield, Massachusetts-based manufacturer of firearms and BB guns, reported profits of $31.4 million or 0.56 per share over its third quarter of 2016, compared with earnings of $8.1 million or 0.15 per share during the same quarter a year earlier. In terms of revenue, the company saw sales increase by 61.5% to $210.8 million, helping gross margin increase from 33.6 to 41.1%.
"The combined strength of our firearms and accessories businesses delivered an exceptional performance, driven by healthy consumer demand across our growing portfolio of firearm and outdoor lifestyle offerings. During the third quarter, the Adjusted National Instant Criminal Background Check System (NICS) data, which serves as an indicator of consumer purchases, reported a significant increase in growth versus the prior year, especially in handguns. In addition, our product through at distribution was much stronger than we had anticipated," Smith & Wesson CEO James Debney said in a statement.
"Our flexible manufacturing model, combined with our ability to successfully utilize the internal inventories we had built in anticipation of potential sell-through strength, allowed us to capture incremental sales in the third quarter," Debney added.
A report issued by the Bureau of Alcohol, Tobacco and Firearms (ATF) last July indicated that gun production has more than doubled since U.S. president Barack Obama took office in 2009. Overall, more than 100 million guns have been bought by Americans during that span, Fox News reported.
Moving forward, Smith & Wesson raised its revenue and earnings guidance for the fourth quarter following the strong sales period over the previous three months. The company now expects revenues between $210 and $215 million and adjusted per share earnings of 0.51 to 0.53.
"Despite the fact that we entered our fourth quarter with lower inventories, we are focused on increasing the production rates of our key products during the fourth quarter and we are therefore increasing our guidance for the full fiscal year," Debney said.
Shares in Smith & Wesson added 1.34 or 5.38% to 25.40 in after-hours trading.