"No apologies here," American Science & Engineering (NASDAQ:ASEI) CEO Anthony Fabiano said during last night's second-quarter conference call. "It's a lumpy business."

He may not be sorry, but it's still a sorry report. Earnings of $0.48 a share came in below last year's $0.49-per-share showing. Revenues climbed 27% higher to $37.6 million. The results fell well short of the $0.62 a share in profitability on $42.9 million in revenues that Wall Street was expecting.

So why isn't Fabiano begging for forgiveness? Well, the company refuses to provide an outlook. Moving costly security equipment isn't easy to lay a finger on. It gets even trickier when most of your business depends on international clients, where the red tape can get chunky and delivery times unpredictable.

So that's it? If you don't provide guidance, the market can't blame you when the overly ambitious pros come up short? Of course not. This doesn't mean that the market won't punish your stock for missing its baked-in expectations.

More importantly, AS&E has now come up short in six of the past seven quarters. Say what you will about the lumpiness of defense contracting, it should smooth out over time. That's not happening here.

Rival OSI Systems (NASDAQ:OSIS) has beaten the market's profit targets in the last four quarters, including this morning's quarterly report.

On a larger defense contracting scale, Lockheed Martin (NYSE:LMT) has topped expectations for 16 consecutive quarters. Northrop Grumman (NYSE:NOC) hasn't been so lucky, but at least it wins more often than it loses in wrestling with analysts' bottom-line guesstimates.

So what's eating AS&E? Well, despite the top-line surge, there was a 44% dip in its high-margin Z Backscatter products. That is the company's X-ray technology that provides photo-like images of scans to detect everything from weapons to smuggled people.

The dip there led to an unattractive product mix on the gross margin front. Beyond that, AS&E also stepped up its research and development expenditures. It's important to spend on new products, though most of the carnage came from the gross margins whack. Besides, even if things would have held up better on the way to the bottom line, the company still came up well short at the top.

This doesn't mean that AS&E is a dud. Homeland security is a major investing theme and the company remains a key player. Rule Breakers recommendations AS&E and iRobot (Nadsaq: IRBT) may have "lumpy" fiscal performances, but their products are in demand. There is also the cruel all-weather twist, knowing that if things get worse on the terrorist or military fronts, that AS&E and iRobot -- just like unmanned aircraft systems maker AeroVironment (NASDAQ:AVAV) -- will perform even better.

So, no, Fabiano doesn't need to apologize about it being a lumpy business. Unfortuantely, it's the shareholders that are taking their lumps, instead.

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