AeroVironment earnings drop 80%

Economy, Business and FinanceMilitary EquipmentFinanceU.S. ArmyFederal Aviation Administration

Monrovia drone maker AeroVironment Inc. reported an 80% downturn in quarterly net income after a drop in military contracts for its small robotic aircraft.

Net income for the 2014 second quarter was $1.7 million, or 7 cents a share. A year earlier, AeroVironment earned $8.7 million, or 40 cents.

AeroVironment said revenue was $64.9 million in its fiscal first quarter. That's down 19.2% compared with $80.3 million last year. It is the fourth quarter in a row that revenue has dropped.

The company depends largely on funding from the Pentagon, which is winding down its presence in the Middle East and preparing for budget cuts.

AeroVironment is the Pentagon's top supplier of small hand-launched drones — including the Raven, Wasp and Puma models — that give troops on the ground a bird's-eye view of what's happening over a ridge or around a bend.

Drone sales for the quarter, which ended Oct. 26, fell 14.3% to $56.1 million from $65.4 million in the same quarter last year.

In a conference call, AeroVironment Chief Executive Timothy E. Conver said the company has had bright spots, in particular securing a backlog of orders for future delivery.

For the quarter, the backlog was valued at $133.8 million, compared with $59.4 million in April.

The company has received particular interest from the Army — $44 million in contracts in the quarter — for its Switchblade, a mini cruise missile that launches from a mortar-like tube.

Soldiers identify and lock on a target, and send a command for the drone to nose-dive into it and detonate upon impact. Because of the way it operates, the Switchblade has been dubbed the "kamikaze drone."

AeroVironment, which makes small spy drones in Simi Valley, also hopes to diversify its customer base in the coming years with the Federal Aviation Administration's impending introduction of regulations allowing small drones into U.S. airspace in 2015.

AeroVironment also makes charging systems for electric vehicles.

Revenue in the electronic charging business fell more than 41% in the quarter, to $8.8 million from $14.8 million a year earlier.

The results were reported after the close of regular trading Tuesday, when AeroVironment shares dropped 53 cents, or nearly 2%, to $26.92. They were up $2.03, or 7.5%, to $28.95 at one point in extended trading.

Twitter: @wjhenn

Copyright © 2014, Los Angeles Times
Related Content
Economy, Business and FinanceMilitary EquipmentFinanceU.S. ArmyFederal Aviation Administration