AeroVironment's Earnings Plunge 80% on Falling Sales

AeroVironment (NASDAQ: AVAV  ) is losing ground in both its unmanned aircraft business as well as electric vehicle chargers. Fiscal second-quarter results were announced after the market closed today, and revenue was down 19% in the quarter to $64.9 million, and net income dropped 80% to $1.7 million, or $0.07 per share.  

The Unmanned Aircraft Systems division saw a 14.3% decline in revenue and nearly a one-third drop in profit. With military spending slowing down, it's not all that surprising that revenue is down in this division.

What's more disappointing was a 41% drop in revenue from Efficient Energy Systems, which includes electrical vehicle chargers. This should be the company's growth engine in the future, so investors should expect growth, not declines, from this part of the business.

Fiscal second-quarter results were bad, but investors can take some hope from a funded backlog that's up from $59.4 million on April 30 to $133.8 million as of Oct. 26. That should result in some growth during fiscal 2015. For now, management still expects $230 million to $250 million in revenue for fiscal 2014 and earnings of $0.35 to $0.50 per share.

Until we see a turnaround in results, it's difficult to be too bullish on AeroVironment. This is a company with a lot of potential but a long way to go to live up to it as well.

A stock on our buy list
Aerovironment is a high risk stock today but there are opportunities on the market that aren't quite so risky. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

DocumentId: 2744398, ~/Articles/ArticleHandler.aspx, 4/16/2014 3:03:27 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement