* Q3 profit beats Street expectations
* Net product sales up 26 pct
* Says amends credit pact to expand debt covenant
* Shares rise as much as 10 pct
March 12 (Reuters) - U.S. firearms maker Smith & Wesson Holdings Corp SWHC.O reported a higher-than-expected third-quarter profit, helped by a double-digit growth in the sales of handguns and tactical rifles, sending its shares up 10 percent.
The company also said it amended its revolving line of credit that expanded the leverage ratio covenant to 3.5 from 3.0 for April 30 through fiscal 2010, and to 3.25 from 3.0 for fiscal 2011.
In a conference call, Smith & Wesson forecast full-year revenue growth of 9 to 10 percent and said it does not expect operating expenses to vary materially throughout fiscal 2009.
For the third quarter, the company posted a net profit of $2.4 million, or 5 cents a share, compared with a loss of $1.8 million, or 4 cents a share, in the year-ago period.
Net product sales rose more than 26 percent to $83.2 million.
Analysts on average were expecting the company to post a profit of 3 cents a share, before items, on revenue of $74.07 million.
The Springfield, Massachusetts-based company, known traditionally for its 155-year old handguns business, said sales of handguns and tactical rifles for the third quarter grew 62 percent over the prior year period. M&P tactical rifle sales rose 111 percent.
However, in a regulatory filing, the company reported a 46 percent drop in sales at its hunting firearms segment.
The company said it was not experiencing any improvement in the weak demand for hunting products.
Shares of the company rose 45 cents at $5.04 in trading after the bell. The stock closed at $4.59 Thursday on Nasdaq. (Reporting by Supantha Mukherjee in Bangalore, Editing by Dinesh Nair)