AeroVironment profit plunges but beats forecasts
AeroVironment Inc., hurt by higher costs and increased spending on research, said its second-quarter earnings plunged 88%.
But the quarterly results for the company, which makes robotic aircraft and charging systems for electric vehicles, were better than what analysts expected. Most anticipated that the Monrovia company would post a loss.
Earnings for the quarter ended Oct. 30 fell to $262,000, or 1 cent a share, from year-earlier profit of $2.2 million, or 10 cents a share. Analysts on average forecast a loss of 6 cents a share.
The results were reported after the close of regular trading. AeroVironment shares rose in after-hours trading, at one point up 85 cents at $24.21.
In a conference call, AeroVironment Chief Executive Timothy E. Conver said the company’s drone aircraft were in growing demand in Afghanistan. The Army recently increased the number of AeroVironment’s Raven aircraft it expects to buy by 8%, he said.
AeroVironment is the Pentagon’s top supplier of small, remotely controlled planes, which include the Raven, Wasp and Puma models. The technology enables troops on the ground to see what lies over a hill or down the road.
“We believe that terror and insurgent threats of this decade will continue to drive demand,” Conver said. “More operators are finding more and more valuable uses of the small systems and their relative cost effectiveness.”
Revenue for the quarter was $63.8 million, up more than 24% from $51.4 million during the same period a year earlier.
AeroVironment increased research spending by 50% to about $8.7 million in the quarter, the company said. Much of that was poured into developing a high-endurance spy plane, dubbed the Global Observer, which is currently in flight testing at Edwards Air Force Base near Mojave. The plane, with its 175-foot wingspan, is designed to fly at 65,000 feet for a week at a time.
AeroVironment is also anticipating returns soon from its business making charging systems for electric cars.
The firm is preparing to roll out home charging docks as Nissan brings its all-electric Leaf passenger car to the market, scheduled for this month.
“We expect home-charging installations to produce revenue starting this quarter, with revenue accelerating into our fourth quarter,” Conver said.
