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AeroVironment (AVAV) Beats on Q2 Earnings, Lifts '19 EPS View

AeroVironment, Inc. AVAV reported second-quarter fiscal 2019 earnings per share (EPS) from continuing operations of 29 cents, beating the Zacks Consensus Estimate of 16 cents by 81.3%. Earnings however declined 9.4% from the year-ago quarter’s 32 cents.

Operational Performance

Revenues of $73 million increased 11% on a year-over-year basis, driven by a 49% improvement in service revenues to $26 million, which outweighed the 2.8% decline in product revenues to $47.1 million.

As of Oct 27, 2018, the company’s funded backlog was $163.9 million, up 44.4% year over year.  

Gross margin contracted 700 basis points to 39% from the year-ago quarter’s 46%.

Total operating expenses increased 10.9% to $21.8 million, thanks to a 6.9% rise in selling, general and administrative expenses and 18.4% hike in research and development costs. Consequently, operating income of $6.6 million showed a decline of 37% from $10.5 million a year ago.

AeroVironment, Inc. Price, Consensus and EPS Surprise


AeroVironment, Inc. Price, Consensus and EPS Surprise | AeroVironment, Inc. Quote

Financial Update

AeroVironment ended the reported quarter with cash and cash equivalents of $151.3 million, up from $143.5 million as of Apr 30, 2018.

Operating cash flow totaled $2.7 million at end of Oct 27, 2018, significantly down from $30 million at the end of Oct 28, 2017.

2019 Guidance  

For fiscal 2019, AeroVironment has updated its financial guidance. The company now expects to generate revenue from continuing operations in the range of $300-$310 million, compared to prior $290-$310 million.

The company raised its earnings per share guidance from the prior range of $1.10-$1.40 to $1.30-$1.50, at 5% ownership of the HAPSMobile, Inc. joint venture.

Zacks Rank

AeroVironment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Defense Releases

Textron TXT reported third-quarter 2018 adjusted earnings from continuing operations of 61 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 19.7%. The bottom line declined 6.2% from 65 cents in the year-ago quarter.

Boeing BA reported adjusted earnings of $3.58 per share for third-quarter 2018, beating the Zacks Consensus Estimate of $3.45 by 3.8%. The bottom line reflected an improvement of 36.6% from $2.62 a year ago.

Teledyne Technologies TDY reported adjusted third-quarter 2018 earnings of $2.23 per share, beating the Zacks Consensus Estimate of $2.05 by 8.8%. The bottom line improved 26% from the year-ago quarter’s $1.77.

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