Smith & Wesson Holding Corp. (NASDAQ:AOBC) isn't slated to officially release its fiscal third-quarter 2015 results until March 3. But that didn't stop the gun maker from optimistically going out on a limb this week. Smith & Wesson stock shot up more than 16% Tuesday, after the company updated expectations for both its current quarter and full fiscal year.

For Smith & Wesson's fiscal third quarter ended Jan. 31, it now expects net sales between $124 million and $126 million, which should translate to GAAP earnings per share between $0.10 and $0.11. Excluding costs related to its acquisition of Battenfeld Technologies, which Smith & Wesson says it completed on Dec. 11, per-share earnings from continuing operations would have been between $0.15 and $0.16.

Either way, that's a significant improvement over the company's view early last month, when it told investors to expect fiscal Q3 revenue between $113 million and $118 million, and per-share earnings excluding acquisition costs of between $0.09 and $0.11. Analysts, on average, were modeling fiscal third-quarter sales and earnings of $117 million and $0.06 per share, respectively.

Consequently, Smith & Wesson also revised guidance for its full fiscal year ending this April 30, calling for net sales between $526 million and $530 million, and GAAP earnings per diluted share of $0.68 to $0.72. Once again, however, that includes roughly $0.06 per share in acquisition costs, which means adjusted full-year earnings per share between $0.74 and $0.78. And again, both ranges not only represent solid improvements over Smith & Wesson's previous guidance, but also stand above analysts' estimates for fiscal 2015 sales and earnings of $517.2 million and $0.63 per share, respectively.

Writing on the wall?
To explain the surprise update, Smith & Wesson cited "positive trends in the primary indicators it uses to assess its business and the consumer firearm market."

Then again, that doesn't exactly give skeptics of the seemingly sluggish industry much to go by. But keep in mind that shortly after its most recent earnings report, I went out on a limb to argue that Smith & Wesson's plunging gun sales were actually a good thing.

After all, Smith & Wesson CEO James Debney regularly reminds investors that, regardless of whether the market is growing or shrinking, they manage the business in such a way that allows them to continually take market share from competitors. Unfortunately, many investors took issue with the fact that strategy last quarter required aggressive promotions to combat a temporary lull in demand amid high inventories at retail.

However, it seemed evident Smith & Wesson's market share-centric approach was succeeding. Only a few weeks earlier, competitor Sturm, Ruger & Company's (NYSE:RGR) quarterly results badly missed the mark after it admitted in a press release that its decision not to match competitors' discounts probably "resulted in lost market share." 

What's more, Debney even elaborated during Smith & Wesson's subsequent conference call that its own point-of-sale analysis and feedback from "a major distributor" indicated that it at least held its market share in fiscal Q2, which meant Smith & Wesson was still the market leader in both handguns and modern sporting rifles.

Ironically, shares of Ruger also climbed 5% Tuesday on the heels of Smith & Wesson's report. To Ruger's credit, Smith & Wesson's positive statement about the broader consumer firearm market should portend good things for other market-leading brands.

But in the end, given its ever-growing market share, I stand by my previous assertion that as the market rebounds, "no company in the space is better positioned for sustained success than Smith & Wesson."