AeroVironment (NASDAQ:AVAV) reports its first quarterly earnings numbers for fiscal 2009 tomorrow afternoon. Want to know what Wall Street expects to see? Read on. Want to know what really matters? Read on a bit more.

What analysts say:

  • Buy, sell, or waffle? AeroVironment, or AV, scores four buy ratings and eight holds.
  • Revenue. On average, analysts predict a 1% rise in sales to $49.7 million.
  • Earnings. Profits are predicted to flatline at 0.18 per share.

What management says:
The big news out of AV this past quarter came in July, when management announced the successful landing of a SOCOM contract that could equal all of last year's revenue. The "Puma AE" contract marks AV's fourth consecutive small-UAV win, confirming this tiny player's competitiveness over bigger names sharing its airspace: Lockheed Martin (NYSE:LMT), Honeywell (NYSE:HON), and Raytheon (NYSE:RTN), to name a few.

What management does:
Profitwise, the company is also formidable. While gross margin continues to descend, AV seems to be "making it up on volume" in its operating margin, which leveled off and regained altitude last quarter. AV easily trumps the single-digit profit margins of much larger companies like Boeing (NYSE:BA) and Northrop Grumman (NYSE:NOC), and basically ties Textron (NYSE:TXT) -- maker of the "Shadow" UAV -- for operating profitability.

Margins

1/07

4/07

7/07

10/07

1/08

4/08

Gross

40.2%

39.4%

38.3%

37.3%

36.9%

36.4%

Operating

15.9%

16.3%

16.2%

14.9%

12.2%

13.2%

Net

9.5%

11.9%

12.1%

11.7%

10.2%

9.9%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
As fine as AV has been flying lately -- recently hitting a new 52-week high -- I admit that I'm getting a little agoraphobic over the stock's valuation: North of a 30 P/E today, analysts don't expect much more than 20% long-term growth. Personally, I've been weighing the idea of cashing out my profits for some time, waiting for Wall Street to overreact to some bit of irrelevant fluff -- as is it wont -- and then buy back in.

But at the Fool, we put our readers first. So before I reach for the parachute myself, let me clue you in: I think the price is high -- but you know that. It could still go higher tomorrow. Wall Street has set the bar for "outperformance" pretty low, predicting flat sales and earnings, both, so it won't take a whole lot to "beat" expectations this time.

Conversely, if AV trips over this very low threshold tomorrow ... look out below.

In the market for news on all things UAV? Go wild:

Fool contributor Rich Smith owns shares of AeroVironment and Boeing. At The Motley Fool, we take our disclosure policy seriously.