AeroVironment Inc.'s (AVAV) fiscal fourth-quarter earnings more
than doubled as the aircraft manufacturer's success in growing
sales and improving margins vaulted results above analysts'
expectations.
But the company predicted revenue for the just-begun fiscal year
mostly below analysts' projections, as it called for 10% to 15%
growth. That assumes revenue between $274.5 million $286.9 million,
compared with average analyst estimate of $285 million from a
survey by Thomson Reuters.
Shares were down 0.5% at $23.15 after hours. The stock was down
20% this year through the close.
AeroVironment--which makes pilotless drones called Ravens for
the military and rechargeable-battery technology for electronic
industrial vehicles--relies on government defense spending.
Although it benefited from higher spending on the military and
green technology in recent years, President Barack Obama's
administration plans to dial back defense budget growth and rein in
bloated programs.
Chairman and Chief Executive Tim Conver said the most recent
results are a result as the company moves "to full rate production
of digital small unmanned aircraft systems." In the previous
quarter, AeroVironment's results were hurt by delays as harsh
weather postponed testing and lethargy in Washington held up
government orders, and the company expected belated Raven orders to
convert to revenue in the just-begun fiscal year. The
administration's fiscal 2011 budget proposal calls for a 56% drop
in spending for the Raven.
But the company has pointed out that the administration's focus
on soldier systems and intelligence, surveillance and
reconnaissance at the Pentagon and electric vehicle infrastructure
domestically were bright spots for growth.
For the quarter ended April 30, AeroVironment posted a profit of
$15.6 million, or 71 cents a share, from $5.8 million, or 27 cents
a share, a year earlier. Revenue jumped 31% to $99.4 million.
Analysts surveyed by Thomson Reuters predicted earnings of 59
cents on revenue of $96 million.
Gross margin climbed to 43.3% from 34.7%.
Contract services revenue rose 16%, while product sales jumped
by half on gains for unmanned aircraft sales.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com