15 November 2012 20:42 [Source: ICIS news]
HOUSTON (ICIS)--The US presidential election result has triggered a surge in ammunition sales double the jump seen when Barack Obama was first elected in 2008, and that in turn is lifting the profit outlook for caustic soda producer Olin, investment bank Dahlman Rose said on Thursday.
Olin owns Winchester, a major supplier of rifle and pistol ammunition for US gun owners.
"The company has a favourable outlook on the Winchester segment largely reaffirmed on the outcome of the recent election," Dahlman Rose said in a summary of Olin's presentation this week to the bank's Global Metals, Mining, and Materials Conference.
"Historically, product demand is relatively stable, but experiences surges every now and then, with the last surge starting the day after the 2008 election and continuing throughout the Obama administration," the summary said.
The day after the 6 November election, the rise in ammunition sales was double the surge experienced the day after the election in 2008, it said.
That phenomenon is "giving confidence to the theory that the surge in demand is likely to continue under the current administration", the summary said.
Obama's Democratic Party is regarded by some gun owners as wanting to restrict the availability of firearms in the US.
An Olin spokesman was not available to comment on Thursday.
A copy of the presentation available on the Olin website did not contain the script for the presentation or make any comments about the election, but included data on an upward trend in background checks conducted before gun purchases.
There is an 88% correlation between those background checks and ammunition shipments, the presentation noted.
Winchester's fourth-quarter earnings are "expected to be twice as high" as the year-earlier quarter's profit, the presentation said.
The ammunition maker's third-quarter earnings of $16m (€12m) were up $3m from a year earlier.
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