Smith & Wesson Holding Corp. (NASDAQ: SWHC),  the No. 1 U.S. maker of handguns, swung to a profit in its fiscal third quarter on higher gun sales and lower expenses, the Springfield, Mass.-based firearms company said Thursday.

The company reported a net income of $5.4 million in the quarter ended Jan. 31, or 8 cents per share, up from a net loss of $2.7 million, or 5 cents per share, during the same quarter last year. Analysts had expected a 4-cent gain, according to the Reuters consensus estimate.

Excluding one-time events, Smith & Wesson had net income of $14.8 million compared with $4.6 million for the same period last year. 

There were a higher number of shares outstanding in the recently completed quarter compared with the fiscal third quarter of 2011.

Operating income was $10.28 million, up from a loss in the year-earlier period of $1.94 million.

Net sales were $98.1 million, up 23 percent from last year's $89.3 million. Operating expenses for the quarter totaled $19.7 million, down from the previous year's $21.3 million.

The sales increase came from the rising popularity of Smith & Wesson's M&P handguns, M&P sporting rifles and personal protection and concealed pistols. The guns' popularity left a $198.5 million backlog of orders at the end of the quarter, an increase of 169 percent from last year's third quarter.

We continued to work on expanding our firearm manufacturing capacity to meet increased demand, an objective we plan to continue in the coming months as we address our robust backlog, said CEO James Debney.

The backlog, coupled with growing demand, prompted Smith & Wesson to boost its sales outlook for the entire fiscal year, which ends April 30. The company now expects annual sales between $395 million and $400 million.

The renowned firearms maker was founded in 1852, and grew as a result of the Civil War. It subsequently became the biggest provider of guns for the nation's police and military. 

The company's share price closed up 25 cents to $5.66, and climbed another 33 cents in after-hours trading.