On March 4th, AeroVironment (NASDAQ:AVAV) announced its Q3 earnings, and shares have shot upward by 27% over the last month since then. The company beat earnings per share estimates by 74%, and beat on revenue estimates by 7%. The big story here, however, is the company's major rebound in revenue, and a big surprise in its profitability.

Since the company's Q3 revenue high of $84.4 million in 2011, the past couple years have seen third-quarter revenue decline by 44%. That Q3 revenue has now rebounded to within 18% of that high in 2011, which Wall Street loved. On the profitability side, while gross margins did fall year over year from 42% to 39%, the company's sharp increase in revenue was more than enough to offset this. Add in to that a nearly 50% reduction in the company's R&D expenses, and that equals a very profitable quarter for AeroVironment.

More broadly, there is a lot of investor excitement at the moment over the company's partnership with Lockheed Martin (NYSE:LMT), and its work on the Global Observer program, which would use high-altitude unmanned aircraft intended to fly for a very long time, and function as a geosynchronous satellite system. In this video, Motley Fool industrials analyst Blake Bos takes a look through the excellent recent numbers AeroVironment has been posting, the opportunities for the company ahead, and whether or not these justify the large premium investors looking to buy shares today would have to pay.

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