Smith & Wesson shares fall after profit decline

After the market closed Thursday, the Springfield, Mass.-based company reported net income of 5 cents per share--down from 11 cents per share earned in the same period last year. Analysts polled by Thomson Reuters were expecting 7 cents per share.

Merriman Curhan Ford analyst Eric Wold in a note reiterated his "Neutral" rating on the stocks.

"After getting burned by over-buying last year, retailers are likely to wait for the ... inventory to sell through before looking to restock shelves later in the year or early next year," Wold wrote Friday.

"With weak industrywide hunting firearms revenues and associated pricing pressures (and required promotional efforts by manufacturers), Smith & Wesson's earnings are likely to be pressured throughout the remainder of this fiscal year," wrote Wold.

"We continue to believe investors should wait for clearer signs that industry revenue upswing trends will continue and inventory levels have declined appropriately."

Wold also trimmed his earnings per share estimate for the 12 months ending in April 2009 by a penny to 27 cents.

Stephens analyst Paul Swinand lowered his full-year earnings per share estimates to 24 cents from 36 cents.

"While there is still potential for larger military and government orders, they are not imminent in the near term," Swinand said.

Shares fell 53 cents, or 9.8 percent, to $4.86. In the last 52 weeks, shares have ranged from $3.72 to $22.