Unmanned aircraft and electric vehicle charging systems sound like two important and exciting markets for AeroVironment
Charging the future
In the Efficient Energy Systems, or EES, business results were solid but nothing like the growth some of us were hoping for. Revenue grew 32.3% to $13.4 million in the quarter and gross margins were 25.3%.
The slower than expected uptick in demand for electric vehicles has resulted in slower than expected growth in charger sales for companies like AeroVironment and General Electric
As automakers like General Motors
Partnerships with Nissan and BMW, along with a slew of major highway charging station contracts, could make the electric car charger market a big opportunity for AeroVironment. But for now it's a slow and steady game waiting for EV sales to pick up.
Flying the skies alone
Unmanned aircraft should be a no-brainer for military operations, especially in the uncertain environments the military is operating in today. But our national budget problems are beginning to have an impact on unmanned aircraft suppliers like AeroVironment and Lockheed Martin
With all of that uncertainty in the air the Unmanned Aircraft Systems, or UAS, segment performed relatively well in the quarter. Revenue increased 24.8% from last year to $66.9 million, and a gross margin of 41% would make most companies jealous. In the current environment of troop draw downs in the Middle East and a tightening budget, those numbers are a testament to how important UAS is to the military.
Foolish bottom line
Overall the quarter wasn't too bad for AeroVironment. Sales were up 26% to $80.4 million and earnings per share were up to $0.30 from a penny a year ago. But there are challenges in its two markets going forward. I'm not giving up on the stock yet, but I am keeping a close eye on how quickly the company grows.