Gunmaker Smith & Wesson is set for a rally, after reporting a quarterly sales increase.
Smith & Wesson ( shares surged 12% in premarket trading Wednesday. )
The growth was fueled by an increase in handgun sales, which surged 30% compared to the same quarter last year.
Gun sales surged following a series of shootings, especially at a Newtown, Conn., elementary school in December 2012, as people feared President Obama would successfully pass restrictive gun legislation.
But Obama failed to get a gun bill through Congress, and FBI data shows that this year's sales have fallen from their peak. The CEO of rival gunmaker Sturm Ruger ( recently warned that )sales are coming down to more "realistic" levels in 2014.
Despite the low expectations, Smith & Wesson increased its estimated sales for fiscal year 2014, which ends in April.
In the latest quarter, the company brought in almost $146 million in sales.
Gross profit also surged. The gunmaker earned $58.7 million compared to $49.9 million during the same quarter last year.