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What's happening: Shares of AeroVironment (NASDAQ:AVAV) were down 11% as of 11:15 a.m. EDT Wednesday morning following the unmanned aerial vehicle manufacturer's fiscal first-quarter financial report Tuesday afternoon. The company saw net losses nearly double on a 9% drop in revenue compared to the year-ago quarter, and although AeroVironment reiterated its guidance for the full fiscal year, the quarterly figures were bad enough to shock investors looking for greater growth from the drone maker.

Why it's happening: The drone market is seen as having huge long-term potential for growth, and so it has frustrated shareholders to see AeroVironment fail to cash in on the trend. Sales for the Unmanned Aircraft Systems unit actually fell slightly from year-ago levels, and even though gross margins have remained healthy, subdued performance from AeroVironment's Efficient Energy Systems business has weighed on the company's overall results. Bullish investors pointed to solid performance in bookings that helped to push AeroVironment's backlog back up to levels seen last year, reversing a negative trend from the fiscal fourth quarter.

Company management remains optimistic about AeroVironment's long-term prospects, pointing to possible growth opportunities in both its drone and energy businesses. Moreover, some of the declines might have stemmed from orders that were delayed beyond the end of the quarter, and if shipments in fact are made during the current fiscal second quarter, then the net impact on AeroVironment's numbers could work itself out over time. Still, without any clear signs that its drone business will take off quickly, shares have continued to fall to levels not seen since 2013. In order to turn itself around, AeroVironment will have to show its current and potential customers that it can tailor-make products that will serve the wide range of possible applications for drones both now and in the future.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns and recommends AeroVironment. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.