GUN Smith & Wesson posts loss

Discussion in 'On Topic' started by TL1000RSquid, Dec 23, 2008.

  1. TL1000RSquid

    TL1000RSquid ΜΟΛΩΝ ΛΑΒΕ

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    http://www.reuters.com/article/mark...081215?pageNumber=1&virtualBrandChannel=10272

    SAN FRANCISCO, Dec 15 (Reuters) - Smith & Wesson Holdings Corp (SWHC.O) posted a quarterly loss on a non-cash accounting charge and reported a plunge in hunting rifle sales that offset handgun growth, sending its shares down as much as 25 percent.

    Sales of hunting rifles fell 41 percent in the quarter as cash-strapped consumers cut back on spending and distributors slowed purchases following a sales slump.

    "The burden that the hunting business places on the otherwise healthy majority of our business is a significant consideration as we plan for our future," Chief Executive Michael Golden said.

    The company has started cost-cutting measures such as extended holiday factory closures, support-function consolidation and job cuts.

    Known for its 156-year-old handgun business, Smith & Wesson said in September it had shed about 80 hunting-related rifle production jobs at its facility in Rochester, New Hampshire.

    The company's troubles reflect a broader trend as the percentage of Americans who hunt declines, though sales of other guns in the country remain strong. Smith & Wesson said quarterly U.S. revolver sales rose 13 percent on a year ago.

    Pistol sales grew 40 percent, driven by demand from U.S. consumers, police forces as well as international sales.

    "In fact, we shipped our first order to Iraq in the second quarter, consisting of M&P pistols for Iraqi military and security forces," Golden said, adding that 465 law enforcement agencies had chosen the same weapon.

    Smith & Wesson, whose rivals include Ruger and Taurus for revolvers and Glock, Ruger and Springfield Armory for pistols, posted a net loss of $76.2 million, or $1.62 a share, for the second quarter ended Oct. 31. It earned $2.9 million, or 7 cents a share, a year earlier.

    The Springfield, Massachusetts-based company made 1 cent a share excluding the $76.5 million charge related to the purchase of Thompson/Center Arms.

    Net product sales rose 2.7 percent to $72.7 million, which includes $5.2 million from non-firearm accessories such as handcuffs.

    Gross margin fell to 27.3 percent from 32.3 percent, partly hurt by lower hunting rifle production volumes and promotional spending on both hunting rifles and handguns.

    Smith & Wesson shares, down by two-thirds from their April highs, were trading at $2.01 after the bell before recovering slightly to $2.19. They closed at $2.67 on Monday on Nasdaq.

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    Is Obama going to bail out S&W? :mamoru:
     
  2. Rev Happy

    Rev Happy Active Member

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    I bought an imported S&W this month
     
  3. Soybomb

    Soybomb New Member

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    While it is sad to see the number of hunters declining, I like knowing that handgun and black rifle sales remain strong. I think they're still behind in marketing their ar15 too and could pick up more ground.
     
  4. 01_Cruiser

    01_Cruiser An American Classic OT Supporter

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    I dont think the number of hunters are declining, only the amount of guns they are buying. Being in NC, everyone I know of is still hunting, and they're still taking their kids out to hunt also. Usually when deer season rolls around, guys would go out and buy a new rifle every few years. Its not because they need one, but because it's just an excuse to buy another gun. Since the economy is shitty, most guys I know have put gun purchases on the backburner and have started focusing on other things for their families than buying something they dont really need.

    Plus, if I needed a new deer rifle, I wouldn't go out and buy a smith and wesson. I'd get a remington or winchester. I dont know a single person that has a bolt action S&W.
     
  5. Soybomb

    Soybomb New Member

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    http://www.prairiestateoutdoors.com/index.php?/pso/article/number_of_hunters_declining/
    "New figures from the U.S. Fish and Wildlife Service show that the number of hunters 16 and older declined by 10 percent between 1996 and 2006 — from 14 million to about 12.5 million. The drop was most acute in New England, the Rocky Mountains, and the Pacific states, which lost 400,000 hunters in that span."

    I haven't seen any more recent numbers but it seems like as good a source for the data as you'll get. Not surprising either as society becomes more urban. I think we're facing the same problem at a slower rate with gun ownership in general.
     
  6. Bloody Sunday

    Bloody Sunday OT Supporter

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    i have a 30 year old S&W 30-06
     
  7. cantankerously

    cantankerously Active Member

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    No one wants a S&W rifle - there are so many better choices for the money.
     
  8. cantankerously

    cantankerously Active Member

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    Same with their shotguns.
     

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