NEW YORK – Taser International Inc. (TASR), the stun gun maker whose product safety has come under scrutiny, on Tuesday said quarterly profit rose 77 percent on higher sales, but results missed Wall Street's forecast and its shares fell 16 percent.
The company, whose electric shock weapons are used by law enforcement agencies across the United States, posted fourth-quarter profit of $5.0 million, or 8 cents per share, compared with $2.8 million, or 5 cents per share, a year earlier.
Wall Street expected 11 cents per share profit, according to Reuters Estimates.
Revenue of the Scottsdale, Ariz.-based company rose 79 percent to $19.2 million, helped by strong sales of its stun guns, but was below Wall Street's average forecast of $20.4 million.
"We were very disappointed and expect poor numbers going forward," said Brian Ruttenbur at Morgan Keegan, who downgraded the stock to "underperform" from a "market perform" early on Tuesday. "There was a lot of cautionary language in the earnings report. I think you're going to see the the first half, maybe all of 2005, being flat or down with 2004."
Taser, which has already warned of a delay in orders as law enforcement agencies test rival products, said in its earnings release that it saw "a certain degree of short-term uncertainty."
The company is "deferring" guidance on earnings this year, Taser executives told analysts on a conference call.
Shares of Taser fell $3.05 to $14.12 in early trade on Nasdaq.
The Securities and Exchange Commission (search) is looking into statements by Taser executives on the safety of its products and the timing of a $1.5 million distribution deal signed at the end of the last quarter.
Tasers, as the company's weapons are known, have been involved in more than 70 deaths in the past four years, according to Amnesty International (search), although the company has maintained that its weapons are safe.
Taser's products are still under test by the government agencies, to establish their safety.
Taser faces a welter of shareholder lawsuits claiming executives played down risks of its weapons to artificially pump up its share price.
Its shares plunged in January, on the news of the SEC inquiry and the company's forecast of a delay in orders. The company has lost almost $1 billion in market value after hitting all-time highs in late December.