Spooked by the twin bad news items of a disappointing earnings forecast and an analytical downgrade, investors are dumping shares of AeroVironment (Nasdaq: AVAV) today. I happen to own shares myself and ... I couldn't be happier.

I'll tell you why in a moment, but first -- the bad news. Yesterday evening, AeroVironment (AV to its friends) reported its fiscal year-end 2010 results. "Record revenue and profitability" in the fiscal fourth quarter were the headline, but the underlying news was significantly less bullish. In a tough year for defense, this maker of unmanned aerial vehicles (and un-gasolined charging stations for electric cars) grew its revenues less than 1%, to $250 million. Operating margins came in at an underwhelming 12%, while net profits plunged more than 15% to just $0.94 per diluted share.

Worse still, in forecasting how things might play out next year, AV hewed to its traditional conservatism and predicted revenue growth of only 10% to 15% (short of consensus expectations for 16% growth), alongside operating margins that could, once again, be as low as 12%.

Aside from that, Mrs. Lincoln, how was the play?
Pretty lousy news, you must admit. While everybody else in the UAV-world -- from Global Hawk-er Northrop Grumman (NYSE: NOC) to Black Hawk roboticist United Technologies (NYSE: UTX) to Phantom up-and-comer Boeing (NYSE: BA) -- is busy reporting new products, new contracts, and generally taking the world by storm, AV seems stuck in a rut.

That said, there is reason to hope things will soon improve. Consider: Earnings dropped 18% last year, but free cash flow turned back up at year-end, holding cash production to just a 5% drop ($25.2 million). Naturally, we don't want to see any decline at all, and so it's disheartening to see that while AV managed to cut its accounts receivable by 10% last year, its inventories spiked 80% higher.

And yet, take a closer look at those inventories and tell me -- what do you see? Finished goods up 100%, yes, and I'd certainly rather see those goods showing up as "goods sold" rather than as "inventory." But work-in-progress is up 170%, which suggests to me that AV is gearing up to complete and deliver quite a lot of finished goods in the near future. Call me an optimist, but as surprised as Wall Street purports to be about AV's guidance, I wouldn't put it past the company to surprise us to the upside with its actual results this year.

Fool contributor Rich Smith owns shares of AeroVironment, which is also a Motley Fool Rule Breakers recommendation. The Motley Fool has a disclosure policy.