Shares of AeroVironment Inc (NASDAQ:AVAV), the supplier of unmanned aircraft systems, tactical missile systems, and other aerospace and defense systems to government agencies, has been under pressure over the last three months due to lower than expected financial numbers. AVAV stock lost 15% of share value in the previous three months after a long run in fiscal 2017.
AeroVironment total market capitalization stands around $1.14 billion, and the stock currently trades around $47 – with the 52-week trading range of $26 to $58.
The surprise loss in the latest quarter and meeker than expected guidance for the full year added to bearish sentiments. The company posted a loss of $0.04 per share in the third quarter of fiscal 2018 despite robust year on year revenue growth of 20%.
The company blamed lower gross margin for smaller than expected results, which dipped to 32% of revenue in the quarter from 36% in the year-ago period. The decrease in gross margin was due to a lower service margin from a UAS program and unfavorable sales mix.
AeroVironment has also issued lower guidance for the full year following the third-quarter loss. They expect earnings per share to stand in the range of $0.45-$0.65, relative to analysts estimate for earnings per share of $0.73.
On the other hand, the company doesn’t see any headwinds for the revenue growth. It has been attaining new contracts from domestic and international markets. AVAV recently announced a new contract win of $44.5M (the most significant international order) to provide drones for the ground forces for the Middle Eastern country.
Its funded backlog also increased to $123 million in Q3, compared to $78 million in the past year period. The company expects to generate revenue in the range of $300 million for the full year, compared to analysts’ consensus estimate for $298 million.
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Wahid Nawabi, AeroVironment chief executive officer, said:
“The AeroVironment team continued to execute our fiscal 2018 plan effectively, increasing third-quarter revenue by 20 percent year-over-year and generating the funded backlog of $123.5 million, which gives us full visibility to the midpoint of our annual revenue guidance range.”
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