AeroVironment, Inc. (AVAV) on Q2 2021 Results - Earnings Call Transcript
Steven Gitlin: Good afternoon, ladies and gentlemen, and welcome to AeroVironment's Second Quarter Fiscal Year 2021 Earnings Call. This is Steven Gitlin, Chief Marketing Officer and Vice President of Investor Relations for AeroVironment. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session after management's remarks. As a reminder, this conference is being recorded for replay purposes. Before we begin, please note that on this call certain information presented contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements and may contain words such as believe, anticipate, expect, estimate, intend, project, plan or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including but not limited to, economic, competitive, governmental and technological factors outside of our control that may cause our business strategy or actual results to differ materially from the forward-looking statements. Wahid Nawabi: Thank you, Steve. Welcome to our second quarter fiscal year 2021 earnings conference call. Before we discuss our business achievements in the second quarter, I would like to address our acquisition of the German robotics company, Telerob, which we announced a few moments ago and is summarized on Slide number 3 of our earnings presentation. Telerob is a leader in advanced ground robotic systems with a strong global customer base and a best-in-class portfolio of unmanned ground vehicles or UGVs serving defense, first response, homeland security and other markets. This is an outstanding growing business in its own right that is poised for further success in the United States and globally and we are excited for them to join our team to support our customers and expand our global footprint. At AeroVironment, our goal is to drive superior shareholder value by developing and maintaining leadership positions in intelligent multi-domain robotic systems for defense, civil and commercial customers. Our broad portfolio includes unmanned aircraft and tactical missile systems that are aerial robots with increasing levels of intelligence and autonomy that derive from our ongoing investments. Telerob’s outstanding team, best-in-class product portfolio, long track record of success and extensive customer base represents an ideal complementary set of capabilities that deliver the ground element of our multi-domain portfolio. Telerob was founded more than 25 years ago and its management team has extensive robotic experience that date back to the 1970s. Kevin McDonnell: Thank you, Wahid. Today, I'll be reviewing the highlights of our second quarter and year-to-date financial performance. I'll be referring to both our press release and earnings presentation available on our website. Similar to last quarter, I will only be addressing the key financial metrics in my remarks and leaving some of the details in the press release and earnings presentation. Revenue for the second quarter of fiscal 2021 was $92.7 million, an increase of 11% from the second quarter of fiscal 2020 revenue of $83.3 million. The breakdown of revenue by product area is contained on Slide 6 of the quarterly earnings presentation. During the quarter we showed strong performance in our TMS product line, which was up 139% from the same period last year. This was partially offset by lower HAPSMobile service revenue and lower Small UAS product revenue. Revenue for the first half of fiscal 2021 was $180.1 million, an increase of 6% from the first half of fiscal 2020 revenue of $170.2 million. Again the increase in revenue was largely due to an increase in TMS revenue partially offset by reduced small UAS product revenue. Turning to gross margin, Slide 7 of the quarterly earnings presentation shows our product, service mix and overall gross margin trends over the past five quarters. Gross margin for the second quarter was $40.9 million or 44% of revenue, compared to $35.2 million or 42% of revenue for the second quarter last fiscal year. Wahid Nawabi: Thanks, Kevin. As we noted, we are strengthening our leading market positions achieving critical milestone in the development and introduction of potentially valuable new capabilities, expanding our offering, deploying our balance sheet to grow our business strategically and delivering on our commitments to our customers. We are developing the solutions and capabilities our defense customers need to confront insurgencies as well as peer and near peer adversaries in both premises and contested environments. And we continue to execute our strategy to offer a multi-domain portfolio of intelligent unmanned solutions and capabilities integrating robotics, sensors, software analytics and connectivity technologies to equip our defense and other customers with the tools to win. By doing so, we believe we will continue to deliver even greater value to our shareholders and our customers. Supported by 83% visibility to the midpoint of our guidance range, we are reaffirming our full fiscal year 2021 guidance of revenue of between $390 million and $410 million as summarized on Slide number 10 of our earnings presentation. We expect to deliver operating margin of between 12% and 12.5% and now expect revised earnings per diluted share of $1.28 to $1.48 as a result of HAPSMobile Inc.’s impairment of its equity investment in Loon LLC. We continue to expect non-GAAP earnings per diluted share, which excludes acquisition-related expenses, amortization of acquired intangible assets, and the HAPSMobile investment impairment of between $1.74 and $1.94. Similar to last year, we expect about one-third of second half revenue in our third quarter based on the midpoint of our revenue guidance range and we expect an EPS loss similar to the third quarter of our fiscal year 2020. As Kevin mentioned earlier, revenue mix will result in a lower gross margin percentage in fiscal year 2021 as compared to the prior year. We also expect research and development investments to range between 11% and 12% of revenue this fiscal year. In summary, to reiterate our main points for today’s call, first, our team continues to deliver strong results during the unprecedented and challenging COVID-19 pandemic keeping us on track to achieve our fiscal year 2021 objectives. Second, we achieved significant milestones during the quarter and our key growth initiatives within Tactical UAS, Tactical Missile Systems, and HAPS. And third, we are successfully executing our long-term growth strategy including deploying our strong balance sheet as we did with the Telerob acquisition, while delivering significant value to our shareholders. Before we open the call to Q&A, I want to say thank you to our customers, our team members, and our shareholders for your ongoing engagement and for challenging us always to deliver excellence. We continue to focus on delivering on our promise to help you proceed with certainty. Kevin, Steve, and I will now take your questions. A - Steven Gitlin: Thank you, Wahid. We will now begin the question and answer session of today’s call. Our first question this afternoon comes from Ken Herbert at Canaccord Genuity. Ken? Ken Herbert: Hi, Steve. Good afternoon everybody. Wahid Nawabi: Good afternoon, Ken. Ken Herbert: Wahid, I just wanted to first ask on LMAMS, if in fact the fiscal 2021 budget has zeroed out the funding, can you just remind us how much of the appropriated money has not yet been spent and what that contribution you think for your full year 2021 what the guidance implies from the LMAMS contract for the year? Wahid Nawabi: Sure, Ken. So, as I mentioned in my remark, the original budget line item request was roughly about $85 million. The House of Representative recommended $69 million roughly. And then, the senate has actually put a zero on that line item as a recommendation. Now, none of this is final. So, the actual authorization is still is around the $69 million, but what gets appropriated is what’s going to matter. No one really knows exactly what will be appropriated. We are in very close contact with our customer. There is still – we are planning on it being zeroed out essentially. However, the reason why I said in my remarks that there is since still significant funds remaining, this is because we’ve had significant dollars of funding on fiscal 2019, fiscal 2020, even beyond before that, there is a significant amount of dollars that are not still awarded to us as part of the existing JUONs contract that we have. That’s number one. Number two, we do have the details in terms of how much revenue we recognize, I believe Steve, you have the specific details of that that you can just iterate for this year. But we are still expecting to achieve our full fiscal year expectation on the Switchblade 300 based on the contract that we have today. So, there is not going to be, in our view, no change on that as of today. We believe that we are going to be able to execute on that. And we are currently executing that as we speak anyway. Ken Herbert: Okay. Great. And if I could, just a follow-up really quickly on Telerob, it’s looks like a nice acquisition. Can you provide any more details in terms of has the business been growing sort of in line with the 15% that you called out for the UGV industry or anything we should – we can think about in terms of the potential revenue contribution of this business once the deal is closed. Thank you. Wahid Nawabi: Sure, Ken. So, we are – I am personally extremely excited and bullish about this acquisition. It makes a whole lot of sense in terms of long-term shareholder value creation. It’s the right move for us strategically. Then there is tremendous amount of synergies on the revenue side and on the top-line. In terms of the business itself, first and foremost, it’s a very well established business that have been around for decades. They have made a very strong name for themselves. They are known for very best-in-class technology. They’ve got some very unique technology and IP related to their design of their systems, number one. Number two, forty plus countries, they do business with already. The business is growing – has been growing in the past few years. Obviously, the company is private right now and we cannot get into the details of that until the deal closes, which we expect that to happen sometimes in the spring, early next calendar year. But we believe that’s going to be accretive GAAP-wise on that in two years and it will be non-GAAP EPS accretive at our fiscal year 2022, really depending on when the close actually takes place. The number one criteria for the close is really the approval of the German government for the acquisition to go through. We have worked it for a while. We are very familiar with the company. We’ve been working with these guys for a significant amount of time. We assess the market. We believe they are very well positioned to compete in both the domestic opportunities, as well as international ones. And a great example of that is, just recently not more than a few weeks ago, two or three weeks ago, we submitted a joint proposal for a U.S. Air Force robotics RFP which AeroVironment is acting as the prime contractor. So, we could not announce the details of that at that time due to its disclosure issues, but we believe that long-term, this is a very, very good acquisition for both our short-term as well as long-term strategy and value creation. Ken Herbert: Thank you. Wahid Nawabi: You are welcome, Ken. Steven Gitlin: Thank you, Ken. And before we go on and respond to your question, Wahid, as we said in our first quarter earnings call, a quarter ago, we expect about $42 million of revenue this year from the army LMAMS contract that was announced on April 30 of this year. So, hopefully, that fills in the answer to that question. We’ll now turn to Pete Skibitski from Alembic Global for our next questions. Pete? Pete Skibitski: Yes. Thanks guys. Nice quarter. Just to follow-up on Switchblade and this appropriations issue, is it reasonable for us to expect that fiscal 2022 Switchblade revenue for you – the 300, the LMAMS will decline? Or how should we think about that? Wahid Nawabi: Thanks, Pete. This is Wahid. So, in terms of fiscal 2022, we are going to provide guidance on that on our fourth quarter earnings. However, this is not something that we believe is going to affect us in terms of our revenue and our relationship and the adoption of Switchblade 300. As you know, we’ve been very successful over the last decade to continue to grow that business. We have been the – by far the almost the sole source provider of this capability to the US Military on a number of competitions, which we have won those hands down across the board in the last several, several years. There is significant amount of dollars already in the budget process from government fiscal year 2018, 2019 and 2020, as I mentioned. A significant portion of that is still not contracted and awarded to us and we expect to get those awards sometimes this fiscal year or the beginning of next fiscal year depending really on how the government proceeds and the COVID situation continues. So I personally do not consider this to be a major issue. I just wanted to communicate to all of you what we have learned so far and what's out there, so you are aware of it. Additionally, last point I want to make on this. The US Army already has a potential competition planned for the phase beyond this JUONS that we have a three year contract on. So, we are working with our customer to make sure that we compete for that and we believe that we are positioned very well for that. So when that award takes place, sometimes probably next calendar year, then it will be a smooth transition from the existing contract and the revenue stream that we have and the awards that we've received to continue beyond that. So, our position is that a, we've had significant revenue, strong growth, and, b, we believe that there is still significant dollars unawarded yet, which we are expecting to receive that, which will sort of bridge the gap between our fiscal year 2021 and the government fiscal year 2021, which will then get to the next competition and next award hopefully. Pete Skibitski : Okay. Got it. I guess, just one follow-up for me on a different topic. There is some chatter out there I think on the Navy Submarine launch UAV program that there has been a lot of exercises and progress has been made and I think there was an RFI out there. So, can you maybe update us on? Are you expecting maybe in calendar 2021 to see maybe a competition for that mission area as well? Wahid Nawabi : Sure. So, the specific Navy Submarine launch UAV that you are referring to is very much geared towards our Blackwing platform and variant of Switchblade. As you know, in the past couple of years, I have been providing updates on our success and our progress with the navy on piloting this and actually doing field trials in the sea with various submarines. So we continue to make progress there. We have had a lot of really good success in terms of trials and real demonstrations and field deployments. Obviously, it's a very critical growth opportunity for us. But the adoption rate within this Navy Submarine is quite slow. So, we expect in that Navy Submarine launch RFI that you see that we will be able to compete, we are positioned really well and we continue to make progress on that front with our customer. So, expect us to obviously compete on that again and we are very well aware of it and engaged with it and we've already delivered a certain number of units to our customer throughout the last year-and-a-half or two. Steven Gitlin : Thank you, Pete. Our next question comes from Peter Arment at Baird. Peter? Peter Arment : Yes. Good afternoon Wahid, Kevin, Steven. Hey, Wahid, question I guess on the Switchblade 600. You mentioned the February kind of timeframe for a potential decision there. Can you maybe just describe what you are expecting there in terms of a competition? Wahid Nawabi : Sure. So, I think, Peter you're referring to the Marine Corps OPFM, Organic Precision Fire Mounted potential program and competition. As I mentioned in my remarks, we have already received about $5 million worth of funding as part of a selection process last fiscal year. And we – this past quarter of this year we've also received an additional $1 million to keep improving the capability, which involves our Switchblade 600 with our customer being the Marine Corps. We think that we are positioned very well, but there are other competitors that are also competing in this competition. However, as you know Switchblade 600s capability is very unique and very, very compelling. We also have a tremendous, I would call it a leg up for sort of advanced progress because of our track record with our original Switchblade in this field. So, the customer intends to have the competition and fly off sometimes in February of this year, which obviously because of COVID it is not guaranteed, but that's what we are – we expect that to happen as of now. And once they do that they expect to down-select to the most mature solution and the best solution to go proceed further. There is approximately $20 million-ish or so in the government fiscal year 2021 budget for the OPFM program and it continues after that to become into an initial rate of – low initial rate of production. And then beyond that, the US Marine Corps has publicly stated that they would like to get into a full production eventually as a result of this competition and down-select. So, the short of it is Peter that we believe A, we're positioned really well, B, our progress and our success so far, gives us a unique advantage in my view to be able to compete, just like we've always done in this space. And three, it is a long-term program that we are really keeping an eye on that we think it's a good starting point for Switchblade 600 amongst other opportunities and we'll keep you updated as we make progress. Peter Arment : That's really helpful color. Thanks Wahid. Just and - just as a follow-up. Kevin, you mentioned, I am sorry if I missed this. You said that there were some delays tied to COVID on orders. Did you quantify that? Or if you can give us a little color that would be helpful? Thanks. Kevin McDonnell : No, we don't have an exact quantification of that. But we are maintaining our guidance for the year and – but obviously with COVID restrictions there has been situations where demos and things like this gets delayed. Wahid Nawabi : Just to add to Kevin's point, Peter, as we said on our remarks, we expect that some of these delays during our fourth quarter earnings call, which was the beginning of our fiscal year 2021 and we provided that, and we actually planned for that as part of our objectives and guidance that we provided. Obviously, this COVID-19 pandemic has been beyond belief, more difficult and also it extended further longer. None of it's actually been outside of our scope and prospective and forecast that we expected. However, given that the pandemic still continues, we still expect some delays. I am so proud of our team. The job, they have done in terms of addressing both the contracting obstacles and delays that we have been experiencing with customers as well as the supply chain issues that we've experienced with some suppliers, not all, just very select some of them. So overall we're making great progress. We are on track, and as you can see from our results that supports it. And then also, for the second half of the year we are positioned well, although we just want to give you all the color as to what the landscape looks like going into the second half of this year. And we'll keep you updated. Steven Gitlin : Thank you, Peter. Our next question comes from Joe De Nardi at Stifel. Joe? Joseph De Nardi : Hey. Good afternoon everybody. Wahid Nawabi : Hey, Joe. Joseph De Nardi : Wahid, you mentioned that you are not expecting, I guess, the LMAMS funding issue to impact, I guess revenue for next year. But as it relates to some of the order delays that you are seeing now, should we take that into account as we think about next year's revenue. Is that a potential risk? Are you assuming that that does kind of negatively impact the business next year? Wahid Nawabi : So, Joe, I mean, we are very, very focused on executing our fiscal year 2021 right now. We will provide specific color to fiscal 2022 on our fourth quarter earnings call. I do however underline or emphasize that our three consecutive years of top-line growth and profitability shows the diversification and the resiliency of our portfolio now versus many years ago. Not only do we have a diversified customer base, but also in terms of countries, geographies, product-line portfolio and opportunities. We feel very good about our chances of long-term value creation and growth. I believe that there are several factors that we are looking forward to and updating you as we progress in terms of opportunities that we have. But I think the long-term picture for us right now as of today looks quite good. And I really like our cars, given what's going on in the world and what our customers’ need and what opportunities we've got in front of us irrespective of the LMAMS. I think that that's going to be – it's just one element of many, many other growth opportunities that we have and even in that growth opportunity we've been growing. We've been growing our LMAMS business for several years. There is significant dollars in the pipeline. We are talking to our customers very, very regularly, obviously remotely and we think that we're going to overcome these issues, especially now that the vaccines are becoming available quite soon. Joseph De Nardi : Okay. And then, Wahid, is there any update on kind of international Switchblade opportunities timing and does that’s being a reality for you? Wahid Nawabi : Nothing really has changed materially since last quarter, because we are still engaged with customers. Obviously, this COVID situation has made it difficult engaging with international customers and having them to work with our – the Department of State, as well as the Pentagon. But we still see potential - multiple countries that are interested, engaged. And as we have more updates we'll let you know. It's just a matter of when versus if you ask me still. Nothing materially has changed from that. We'll continue to make progress, but at a slower rate due to COVID. Steven Gitlin : Thank you for your questions, Joe. We'll now take the next question from Louie DiPalma from William Blair. Louie? Louie DiPalma : Wahid, Kevin, and Steve, good afternoon. Wahid Nawabi : Good afternoon, Louie. Louie DiPalma : Regarding the Switchblade 600 makeup for the Organic Precision Fires Mounted program, I was wondering how strong are AeroVironment's patents for the Switchblades wave-off capability? Wahid Nawabi : Very good question and great insight, Louie. Our wave-off is A, one of the most important patents on our Switchblade portfolio, but it's not the only one. We believe that that patent is very critical. It's very defensible. We have multiple patents both in terms of specific narrow technology patents that address the specifics very deep narrow technology area, but also quite broad ones like the wave-off. So, we have – when we make these investments in R&D to develop these capabilities, we always think about how to make sure how we defend that. And we also have a track record of defending our technology and our IP, as you've seen from previous gains that we've had in litigations of similar type of matters. So, again, I think that our technology is strong, I think our position and our progress so far gives us also an advantage. But we're not relying just on that. We believe that we want to make sure irrespective of technology that our solution is the best solution for our customers when it comes to their selection. And we feel good about it. So, when we look forward to the competition as we always do, that's the business that we are very familiar with competing and having a high win rate in our competitions. Louie DiPalma : Sounds good. And you guys made great progress with the Sunglider and you spoke about the video call and the high-quality resolution. And Kevin, you indicated that HAPSMobile had a write-down associated with its investment in Loon, And I was wondering what are the implications of Google potentially, no longer looking to fund Loon? And like, is there an opportunity for AeroVironment to potentially acquire like Loon's technology assets in order to have that intellectual property for the telecom that's involved in the radio access layer and provide connectivity? Thanks. Wahid Nawabi : So, Louie, this is Wahid. A great question again. In terms of the impairment, it was really just an accounting exercise on our side. It was related to an investment that HAPSMobile made into Loon LLC that based on Alphabet and Loon LLC's own decision and process – accounting process triggered a devaluation of that investment, which then triggered an impairment in our side, one-time of course and it sort of expedited the impairment losses of our investments into HAPSMobile. So it has nothing to do with our business operations, particularly and it has almost it literally happen to do with the HAPSMobile's relationship with us of AeroVironment. In terms of Loon, that's really a question related to Alphabet and Loon themselves. I am not in a position to have insight into that. Obviously, we are not involved in their business. We feel very good about our relationship in general as they are sort of like a supplier to us on the payload of the HAPSMobile. We flew that payload. We demonstrated the capability. We continue to talk and work together. And all of us, both SoftBank and AeroVironment is quite bullish about our beliefs and Sunglider's prospects for success in the long run. We've always believed in that. I think that our track record of success so far substantiates and supports and improves the fact that this is a very viable platform for the connectivity of the global population of human being on this globe. So, we look forward to that. Steven Gitlin : Thank you, Louie. We'll now turn back to Joe DeNardi from Stifel with follow-up question. Joe? Joseph De Nardi : Thanks. Just two for Kevin, I think. Can you give us what's international sales were in the quarter? Just total international including HAPS? Kevin McDonnell : Total international is actually split 50-50. It was just around $46 million, little over $46 million. Joseph De Nardi : Okay. Great. And you talked about kind of lower G&A, I guess, as a result of travel and trade shows. How much of that is structural? I mean, how material could that be on the other side of this? Do you expect it to be for most of it to come back or to be reinvested elsewhere? Thank you. Kevin McDonnell : It's difficult to say when comeback will happen. So, but obviously there would be some reinvestment at that time and we're not really putting the number on it right now. Joseph De Nardi : Okay. Thank you. Steven Gitlin : Thanks for the follow-up question, Joe. Yes, and we appreciate it. And at this point we have no further questions today. We thank you for your attention and for your interest in AeroVironment. An archived version of this call, all SEC filings and relevant company and industry news can be found on our website avinc.com. We wish you a joyous and a healthy holiday season and New Year and we look forward to speaking with you again following next quarter's results. Good day.AVAV Ratings Summary
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AeroVironment Shares Gain 5% Following Q4 Earnings
AeroVironment (NASDAQ:AVAV) stock surged more than 5% intra-day today after the company reported its Q4 earnings results, with revenue of $186 million beating the Street estimate of $164.97 million. EPS came in at $0.99, compared to the Street estimate of $1.02.
The company provided its full 2024 year outlook, anticipating EPS to be in the range of $2.30-$2.60, compared to the Street estimate of $2.04, and revenue in the range of $630-$660 million, compared to the Street estimate of $600 million.
CEO Wahid Nawabi expressed confidence in AeroVironment's prospects for strong growth in fiscal 2024, citing the company's record-setting revenue and backlog. Although AeroVironment was not chosen to move forward with increment 2 of FTUAS (Future Tactical Unmanned Aircraft Systems), Nawabi emphasized that the company's current position bodes well for its future. He stated that AeroVironment has never been in better shape in terms of its future outlook than it is today.
AeroVironment Shares Gain 5% Following Q4 Earnings
AeroVironment (NASDAQ:AVAV) stock surged more than 5% intra-day today after the company reported its Q4 earnings results, with revenue of $186 million beating the Street estimate of $164.97 million. EPS came in at $0.99, compared to the Street estimate of $1.02.
The company provided its full 2024 year outlook, anticipating EPS to be in the range of $2.30-$2.60, compared to the Street estimate of $2.04, and revenue in the range of $630-$660 million, compared to the Street estimate of $600 million.
CEO Wahid Nawabi expressed confidence in AeroVironment's prospects for strong growth in fiscal 2024, citing the company's record-setting revenue and backlog. Although AeroVironment was not chosen to move forward with increment 2 of FTUAS (Future Tactical Unmanned Aircraft Systems), Nawabi emphasized that the company's current position bodes well for its future. He stated that AeroVironment has never been in better shape in terms of its future outlook than it is today.
AeroVironment Reports Q2 Miss, Provides Guidance
AeroVironment (NASDAQ:AVAV) reported its Q2 results, with EPS of $0.00 coming in worse than the Street estimate of $0.20. Revenue was $111.6 million (down 9% year-over-year), missing the Street estimate of $113.43 million.
Top-line results were impacted by lower product sales and service revenue primarily due to decreases in SUAS (Small unmanned aircraft systems). The company highlighted $197 million in Q2/23 bookings, with a total backlog approaching approximately $400 million.
The company expects full-year EPS to be in the range of $1.26-$1.58, compared to the Street estimate of $1.57. Revenue is expected in the range of $505-525 million, compared to the Street estimate of $510.24 million.
AeroVironment Reports Q2 Miss, Provides Guidance
AeroVironment (NASDAQ:AVAV) reported its Q2 results, with EPS of $0.00 coming in worse than the Street estimate of $0.20. Revenue was $111.6 million (down 9% year-over-year), missing the Street estimate of $113.43 million.
Top-line results were impacted by lower product sales and service revenue primarily due to decreases in SUAS (Small unmanned aircraft systems). The company highlighted $197 million in Q2/23 bookings, with a total backlog approaching approximately $400 million.
The company expects full-year EPS to be in the range of $1.26-$1.58, compared to the Street estimate of $1.57. Revenue is expected in the range of $505-525 million, compared to the Street estimate of $510.24 million.
AeroVironment Shares Drop 4% on Q4 Miss & Soft 2023 Outlook
AeroVironment, Inc. (NASDAQ:AVAV) shares closed more than 4% lower on Wednesday following the company’s reported Q4 results, with EPS of $0.30 coming in worse than the Street estimate of $0.39. Revenue was $132.6 million, compared to the Street estimate of $135.3 million.
The company provided a relatively soft 2023 outlook, which highlighted continued supply chain disruptions as a significant revenue headwind, especially in its TMS business. For the full year, the company expects EPS to be in the range of $1.35-$1.65, compared to the Street estimate of $1.75, and revenue in the range of $490-520 million, compared to the Street estimate of $513 million.
According to the analysts at RBC Capital, the demand outlook across the company's portfolio is strong, with now over 20 countries approved for the Switchblade. The analysts continue to believe the company has seen a positive inflection in the demand for its small UAS and TMS products, and maintain their outperform rating and $100 price target.
AeroVironment Shares Up 8% Following its Biggest Sell-Off in 12 Years
AeroVironment, Inc. (NASDAQ:AVAV) shares recovered on Wednesday, trading more than 8% higher in the afternoon, following the sell-off yesterday (its biggest selloff in 12 years), which was followed by the company’s reported Q3 results.
Although the Q3 results were strong, with both EPS and revenues of $0.78 and $122.01 million beating the consensus estimates, the company’s 2022 outlook was disappointing.
Much of the revenue growth was due to the 2021 acquisitions of Arcturus (February 2021) and Telerob (May 2021).
The company materially lowered its 2022 outlook, expecting revenue of $450 million, down from prior guidance of $570 million. The EPS estimates were lowered to $1.23 - $1.37. The magnitude of the reduction is surprising considering that the company had visibility on around 66% of its prior full year $570 million revenue guidance exiting fiscal Q1.
