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By Taylor Tepper
June 20, 2014
A Smith & Wesson .357 magnum revolver is displayed for customers to rent at a Gun Club on December 7, 2012 in Los Angeles, California.  Gun enthusiasts rent the the weapon to try out before making a purchase at a gun store . Leading firearms maker Smith & Wesson reports almost 50 percent increase in sales revenue.
A Smith & Wesson .357 magnum revolver is displayed for customers to rent at a Gun Club on December 7, 2012 in Los Angeles, California. Gun enthusiasts rent the the weapon to try out before making a purchase at a gun store . Leading firearms maker Smith & Wesson reports almost 50 percent increase in sales revenue.
Kevork Djansezian—Getty Images

Smith & Wesson, one of the nation’s largest firearms makers, released its earnings yesterday, and it was not good.

The Springfield, Mass.-based company saw its 4th quarter revenue drop 4.6% from the year before (or 1.5% if you exclude the effects of guns made by Carl Walther GmbH of German which S&W no longer sells).

Moreover, the gunmaker’s financial outlook left much to be desired. The company announced that it expects net sales in the next fiscal year to be between $585 million and $600 million, with earnings per share (EPS) between $1.30 and $1.40. Analysts at Wedbush Securities, for instance, had expected revenue of $642 and EPS of $1.50, per a recent report.

Still, all is not lost for shareholders.

For one thing the company actually improved its position this past fiscal year. On the whole, revenue increased to $627 million from $588 million last year and $412 million in 2012. Net income also rose to $89 million from $78 million 12 months earlier.

Thanks to increased sales, the company’s stock is up and has been for a while. Prior to the latest earnings release, S&W’s annualized return was 77% over the past three years. While the stock did drop as much as 17% after earnings were announced, the stock price is still up 49% over the past five years.

And more people than ever are in the market for guns, especially handguns.

The National Shooting Sports Foundation (a firearms industry trade association) adjusted background check numbers show there were about two times as many background checks this past May than in 2001.

Adjusted background checks are down year-over-year, but that was due to a post-Newtown demand surge, according to Wedbush, which is now “returning to normal.” Moreover, S&W handgun sales have increased by $100 million over the past year.

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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