New Pistols From S&W Drives Earnings, Stock Price Spikes

New Pistols From S&W Drives Earnings, Stock Price Spikes

New Pistols From S&W Drives Earnings, Stock Price Spikes


Late Friday, shares of Smith & Wesson parent American Outdoor Brands (NASDAQ:AOBC) spiked 43.60% Friday after unexpectedly robust earnings and an optimistic financial outlook.

The Springfield, Mass., company said net income came to $7.6-M in the FQ-1, after a loss of $2.2-M in the same frame a year ago. Excluding 1-time items, adjusted EPS rose to 21c from 2c.

Wall Street analysts had expected an adjusted profit of 12c/share.

Net sales rose 7.6% to $138.8-M, beating the consensus Street estimate of $134.5-M.

The firearms segment said revenue rose 5.9%.

American Outdoor Brands also issued guidance for FQ-2 earnings of 11c to 15c a share. That’s better than the 8c/share that analysts anticipated.

Company CEo James Debney pointed to the company’s new products, including the M & P Shield 380 EZ pistol, as a driving force behind the most recent Quarter’s upbeat results.

“That pistol has been extremely well received by our consumers and continues to gain momentum,” Mr. Debney said in a statement.

Firearm sales dropped last year after gun enthusiasts expected that Donald Trump’s election victory could delay stricter gun control measures and therefore lessen the desire to stockpile weapons.

“Industry inventory appears cleaned up,” IFS Securities analyst Ron Bookbinder, said. Mr. Bookbinder has a “strong buy” rating on American Outdoor shares, citing “an improved environment for the firearms industry and a possible inflection point for firearm manufacturers.”

Shares of American Outdoor (AOBC)rose $4.26, or 43.60, to close Friday at 14.03 in New York

Before late Thursday’s earnings announcement, American Outdoor Brands shares had lost nearly 20% YTD

Gun control activists have called for a boycott of investment managers Vanguard and BlackRock, which are the largest owners of several publicly traded firearms manufacturers due to their ETFs. In April, BlackRock introduced new ETFs that excluded stocks of gun manufacturers and retailers, including American Outdoor Brands.

Symbol Last Trade Date Change Open High Low Volume
NASDAQ:AOBC 14.03 31 August 2018 4.26 11.9 14.04 11.7 25,647,500
HeffX-LTN Analysis for AOBC: Overall Short Intermediate Long
Neutral (0.22) Neutral (0.21) Bullish (0.30) Neutral (0.14)


Have a terrific week,

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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