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.