“Shares of gun manufacturer Smith & Wesson plunged this week,” investorguide.com reports, “despite reporting third quarter earnings that surprisingly more than tripled from the prior year quarter.” The Great Gun Surge has pumped-up the volume on the gunmaker’s bottom line. Revenues rose 38.8% ($136.2m). Profits soared by 26 cents per share ($14.6 million). That’s a 228% increase from the prior year quarter. To say Smith & Wesson Security Solutions has been a drag on profits would be like saying Rosie Huntington-Whitely would look good holding a double barreled shotgun. Which Smith doesn’t make. Anyway, S&W tried dumping the division. In January they inked a $63m contract with the U.S. Army Engineering and Supporter Center. So that’s good too. What’s not so good . . .
Wedbush securities Rommel Dionisio stated that a ban on assault rifles would impact Smith & Wesson’s earnings by up to 40 cents per share for the year. Military & Police tactical rifles would immediately be banned, which currently generate 20% of Smith & Wesson’s annual sales. A ban on high capacity magazines would also “severely hamper” sales of several of the company’s pistols, stated Dionisio.
With the possibility of a federal assault weapons ban dead in the water—unless another spree killer lets loose with a modern sporting rifle in the near future—you’d think analysts would discount a discount.
Saying that, New York’s enhanced AR ban signals the beginning of the end for S&W’s AR sales in a half dozen states or so. So . . . what about a Smith & Wesson ban on AR and pistol sales to law enforcement agencies in the gun ban states?
Nope. Not unless consumers put pressure on Smith to get with the program. But maybe then, as the company’s collective conscious surely remembers the punishment owners meted out to S&W when they last played footsie with the gun grabbers.
Watch this space.