How the Wheels Came Off AeroVironment's Bus

Before you go, we thought you'd like these...
Before you go close icon

AeroVironment (NAS: AVAV) reported earnings on Mar. 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 28 (Q3), AeroVironment whiffed on revenues and earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share contracted significantly.

Margins shrank across the board.

Revenue details
AeroVironment reported revenue of $72.0 million. The 12 analysts polled by S&P Capital IQ expected sales of $87.3 million on the same basis. GAAP reported sales were 15% lower than the prior-year quarter's $84.4 million.

anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.26. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.43 per share. GAAP EPS of $0.26 for Q3 were 50% lower than the prior-year quarter's $0.52 per share.

anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 38.1%, 230 basis points worse than the prior-year quarter. Operating margin was 10.2%, 840 basis points worse than the prior-year quarter. Net margin was 8.0%, 560 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $99.8 million. On the bottom line, the average EPS estimate is $0.62.

Next year's average estimate for revenue is $328.1 million. The average EPS estimate is $1.30.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 587 members out of 605 rating the stock outperform, and 18 members rating it underperform. Among 137 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 135 give AeroVironment a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AeroVironment is hold, with an average price target of $32.30.

Over the decades, small-cap stock, like AeroVironment have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of AeroVironment. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners