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AeroVironment, Inc. (AVAV) announced its financial results on Tuesday for the first quarter ended August 1, 2009.
Revenue for the first quarter of fiscal 2010 was $37.9 million, down 29% over first quarter fiscal 2009 revenue of $53.6 million. Loss per share for the first quarter of fiscal 2010 was $0.17, compared to first quarter fiscal 2009 earnings per diluted share of $0.22.
Tim Conver, Chairman and CEO of AeroVironment, commented in a conference call, "We are seeing about the general performance that we expected for Q1. Our revenue was slightly lower than we had planned due to the deferral of Raven UAS deliveries as customers await the second half availability of new digital Raven systems. The lower revenue and steady spending in Q1 to support full-year growth adversely affected profitability and produced a loss. Although I am not pleased with our first loss as a public company, this general pattern did not come as a surprise given the digital Raven transition."
He continued, "Our predicted low first half performance and higher second half are being driven by the planned conversion of the U.S. Army and U.S. Marine Corps from analog to digital Raven systems. The conversion and retrofit is a high priority for both. So, low revenues and the negative profitability in Q1 were the necessary price for the transition to a compelling new digital capability, a very important one to our cutomers and the company."
Mr. Conver explained, "Our long term growth opportunities are stong and have never looked better. The underlying demand for our solutions is strong, and the potential market opportunities for our solutions in development remain attractive."
He concluded, "We lead the market for small unmanned aircraft systems and support all existing programs of record for the U.S. Department of Defense. The DoD is committed to supporting ground forces with tools that enhance intelligence, surveillance and reconnaissance and protection. Our solutions are consistent with that goal and uniquely affordable, and our customer relationships are very strong."
AeroVironment expects 18% to 22% revenue growth in fiscal 2010 with 12% to 14% operating income margin. The Company expects its 2nd half to account for 70% of its full-year revenues due to the digital Revsn retrofit for the U.S. Army and U.S. Marine Corps.
Janney Montgomery downgraded AVAV today to Neutral from Buy following the Company's Q1 loss. The firm also cut its price target to $29 from $33.
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