Shares in AeroVironment Inc (NASDAQ:AVAV) came crashing down to earth on Wednesday morning despite the drone maker disappointed with its full-year results and near-term guidance.
Revenues for the 12 months ended April 30 were broadly flat US$264.9mln (2016: US$264.1mln), with a fall in sales from its unmanned aircraft systems (UAS) business offsetting a US$5.6mln rise in the energy efficient systems (EES) division.
Gross margins came under pressure during the year and slipped to 39% from 42% a year earlier, with AeroVironment blaming the higher costs of developing its existing product range.
Net income did rise in fiscal year 2017 though, growing to US$12.5mln from US$9mln a year earlier.
Final quarter solid, next quarter less so
The performance in the final quarter of the year was much more pleasing, the NASDAQ-listed company said.
In the final three months, revenues soared by nearly 50% to US$125.4mln, with net income quadrupling to US$30.5mln.
Given the stronger performance towards the tail-end of the year, investors were looking for that momentum to have continued into the current year but Aero said that wasn’t the case.
The drone maker is looking for sales of between US$40mln and US$44mln in the current fiscal first quartered, which didn’t compare favourably with Wall Street estimates of US$50mln.
Similarly, projections of a loss of US$0.32 to US$0.40 a share for the quarter were more than double what those following the stock had expected.
Slightly further out, the guidance is a little better and more consistent with investors' expectations.
AeroVironment expects sales of between US$280mln to US$300mln which would represent year-on-year growth of around 10%, and it's also looking for earnings of US$0.45 to US$0.65 per share.
'Well-positioned for long-term growth,' says boss
"International demand for our family of small unmanned aircraft systems and domestic demand for our family of Tactical Missile Systems drove full year revenue to US$264.9 million, within our guidance range, and fully diluted earnings per share to US$0.54, significantly above guidance and 38% higher than last year,” said president and chief executive Wahid Nawabi.
“Our team executed our fiscal 2017 plan effectively, growing year-end funded backlog by 19% over the previous year to US$78 million…positioning AeroVironment for long-term growth.”
Shares dipped 9% in pre-market trading to US$29.50.