What happened 

Shares of drone and EV charger manufacturer AeroVironment, Inc. (NASDAQ:AVAV) jumped 23.2% in December, according to data provided by S&P Global Market Intelligence, after the company reported a much better than expected fiscal second-quarter earnings report. 

So what 

Revenue jumped a whopping 47% versus a year ago to $73.8 million, gross margin improved 700 basis points to 42%, and net income swung from a loss of $4.2 million to a profit of $7.0 million. Funded backlog also increased 49% to $127 million as customers ordered new drones and funded research into new products. 

Drone flying above a field.

Image source: Getty Images.

There was a lot to like in the quarter, and management's expectation of $280 million to $300 million of sales for the year and earnings of $0.45 to $0.65 per share are 9% and 2% increases from a year ago, respectively. 

Now what 

Crushing expectations is great for AeroVironment in the short term, but long-term investors will want to see margins and earnings remain at an elevated level to stick with the stock. The company has a history of boom-and-bust operations, and it looks like we're in a boom time right now. Watch for wider adoption of the company's commercial drone and EV charging products as a sign that a more stable customer base is building. Relying on military customers can be rough on operations, so a broader base of customers developing in 2018 would be a great sign for long-term investors. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.