Taser International Inc. Wednesday reported sharply lower fourth-quarter profit as safety concerns depressed sales of its stun guns, sending its shares down sharply.
Taser, which has faced a barrage of lawsuits and bad publicity over deaths linked to its weapons, reported quarterly profit of $92,697, or nil per share. That compares with a profit of $4.7 million, or 7 cents per share, in the year-ago quarter.
Sales fell 34 percent to $12.6 million, but selling, general and administrative expenses rose by 50 percent to $7.3 million, as the company defends a number of lawsuits and conducts an aggressive publicity campaign on the benefits of its weapons.
On average, Wall Street was expecting 1 cent per share profit, on revenue of $12.5 million, according to Reuters Estimates.
Looking forward, Taser said it expected to see revenue from its new Taser Cam product — a camera attached to the weapon that records what the weapon is pointing at when in use — from the second quarter of this year.
The company also said it may book some profit from a $575,000 payment it received from its insurers associated with a legal case, after it has covered its legal costs.
Taser’s weapons are still widely used by U.S. police departments, but many law enforcement agencies have held off ordering more Tasers as safety concerns continue to dog the company.
The company’s stun guns, which disable victims with a 50,000-volt shock, have been linked to more than 100 deaths since 2001, according to human rights group Amnesty International.
Taser says its weapons actually save lives when used by police officers as an alternative to guns. So far the company has faced 12 wrongful death and personal injury suits but each has been dismissed.
Although Taser’s sales and earnings are down from peaks in late 2004, its stock is up sharply this year, after the company resolved an investigation into its accounting by securities regulators.
Taser’s shares are up about 48 percent so far this year. They fell as low as $5.31 in October, as investors worried about the outcome of an investigation by the Securities and Exchange Commission into the accounting for a large order from a retailer and Taser executives’ comments on the safety of the company’s weapons. Taser’s shares hit an all-time high of $33.45 in December 2004, as sales and profit surged.
