Shares of drone maker AeroVironment, Inc. (AVAV -1.03%) had a rough end to the summer, falling 12.7% in August, according to data provided by S&P Global Market Intelligence, after the company reported earnings that failed to inspire investors.
Revenue dropped 23% in the fiscal first quarter to $36.2 million and net loss grew from $7.0 million to $11.6 million, or $0.51 per share. Wall Street analysts were only expecting a $0.15 per share loss, that's why the stock dropped as much as it did.
What management didn't change is the company's full-year revenue guidance of $260 million to $280 million and earnings guidance of $0.20 to $0.35 per share. Orders just came in more slowly than expected in the first quarter, and there were challenges getting approval to sell products internationally as well.
Management may be confident the company will hit full-year guidance, but investors think odds are slim. The company even added a press release the day after earnings reminding investors that full-year guidance hasn't changed, which is unusual for a company to do.
There's a big opportunity in the drone market for AeroVironment, but the company has to start showing it can turn opportunity into growth and profits. Until that happens, investors will continue to take a skeptical view of the company. And that skepticism was what caused shares to turn south in August.