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AeroVironment (AVAV) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

AeroVironment, Inc. AVAV is set to release third-quarter fiscal 2019 results on Mar 7, after market close.

In the last reported quarter, the company delivered a positive earnings surprise of 81.25%. Also, it has an average four-quarter earnings beat of 257.01%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Services revenues have been providing a boost to AeroVironment’s quarterly revenues for the past couple of quarters. We can expect the upcoming quarterly results to reflect a similar trend. Moreover, a smooth flow of contracts bolsters its top-line performance. The momentum is anticipated to continue in the soon-to-be-reported quarter as well.

Considering these factors, the Zacks Consensus Estimate for third-quarter revenues is pegged at $75.3 million, mirroring a 17.7% improvement year over year.

However, the company’s results are expected to reflect lower profitability in the second half due to higher planned operating expenses and a shift in its revenue mix with increased services sales compared to product sales.

Consequently, we may anticipate the upcoming quarterly results to reflect such lower profits.

AeroVironment, Inc. Price and EPS Surprise

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

On the flip side, AeroVironment’s bottom line in the fiscal third quarter is expected to benefit from solid revenue growth and lower tax rates.

Evidently, the Zacks Consensus Estimate for third-quarter earnings stands at 14 cents, reflecting a year-over-year improvement of 55.6%.

Earnings Whispers

Our proven model does not conclusively show that AeroVironment is likely to beat on earnings in third-quarter fiscal 2019. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. This is not the case here, as you see below.

Earnings ESP: AeroVironment has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AeroVironment currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Recent Defense Releases

Huntington Ingalls Industries’ HII fourth-quarter 2018 earnings of $4.94 per share surpassed the Zacks Consensus Estimate of $4.45 by 11%.

Spirit AeroSystems Holdings SPR reported fourth-quarter 2018 adjusted earnings of $1.85 per share, which surpassed the Zacks Consensus Estimate of $1.78 by 4%.

Raytheon Company RTN reported fourth-quarter 2018 earnings per share (EPS) of $2.93 from continuing operations, which outpaced the Zacks Consensus Estimate of $2.89 by 1.4%

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Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report
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Raytheon Company (RTN) : Free Stock Analysis Report
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