UPDATE: Smith & Wesson Tops Q3 Expectations, Shares Surge After-Hours

Shares of

jumped more than 8% in after-hours trading after the company reported stronger-than-expected results for the fiscal third quarter and raised its outlook for the year. The Springfield, Massachusetts-based company posted quarterly income from continuing operations of $8.2 million, or $0.15 per diluted share, down from $20.1 million, or $0.35 per diluted share, in the year-ago period. Its adjusted earnings from continuing operations came in at $0.20 per share in the latest quarter. Its revenue slipped 10.5% to $130.6 million. However, analysts were expecting earnings of $0.11 per share on revenue of $123.32 million. Firearm division net sales dropped 14.7% to $124.5 million in the quarter, while accessories division net sales came in at $6.1 million. Gross profit margin narrowed to 33.6% for the third quarter, versus 40.2%, in the year-ago quarter. Operating expenses rose to $28.1 million from $27.5 million, while operating income slipped to $15.7 million from $31.1 million. James Debney, Smith & Wesson Holding Corporation President and Chief Executive Officer, said, "Our third quarter results reflect the successful navigation of a normalizing firearm market following an earlier consumer surge in firearm purchases, combined with the ongoing focused execution of our long-term strategy. Sales in our firearm division exceeded our updated expectations, reflecting solid orders from distributors and key retailers at the start of our annual industry show season in January." For the fiscal fourth quarter, Smith & Wesson expects earnings of $0.24 to $0.26 per share on revenue of $162 million to $166 million. Analysts had projected earnings of $0.24 per share on revenue of $161.8 million. For full fiscal 2015, Smith & Wesson now projects adjusted earnings of $0.87 to $0.89 per share on sales of $532 million to $536 million. Analysts had estimated earnings of $0.70 per share on revenue of $526.9 million. Smith & Wesson shares climbed 8.81% to $14.20 in the after-hours trading session.