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AeroVironment (AVAV) Reports Loss in Q1, Sales Improve Y/Y

·4 min read

AeroVironment AVAV reported first-quarter fiscal 2022 loss per share of 17 cents, narrower than the Zacks Consensus Estimate of a loss of 26 cents. The company had reported an earningsof 44 cents in the year-ago quarter.

The year-over-year decline can be attributed to increase in selling, general and administrative,andresearch and development expenses in the quarterunder review.

Total Revenues

The company’s net sales improved 16% year over year to $101.0 million in the reported quarter, primarily driven by increase in service revenues of $18.8 million, partially offset by a decrease in product sales of $5.2 million.

However, total sales missed the Zacks Consensus Estimate marginally by 0.09%.

AeroVironment, Inc. Price, Consensus and EPS Surprise

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

Segmental Performance

Product Sales:Net revenues in this segment declined 8.98% to $53.1 million from the prior-year quarter’s $58.3 million. The decrease in revenueswas mainly due to lower sales realised fromtheSmall Unmanned Aircraft System.

Contract Services: The segment’srevenues amounted to $47.9 million in the first quarter, reflecting an increase of64.6% year over year. The revenue increase can be primarily attributed to incremental revenuesearned from its recent acquisitions of Arcturus UAV and Telerob GmbH. Tactile Missile Systems reported an increase in fiscal first-quarter revenues.


At the end of the reported quarter, the company’s total funded backlog was $257.7 million, up 21.7% quarter over quarter.

AeroVironment reported a gross profit decline of 19% year over year to $28.7 million, primarily due to a decrease in product margin of $5.7 million anda reduction in service margin of $1.0 million. Grossmargin contracted 1200 bps to 28% from the prior-year period.

Operational Update

AeroVironment’s total costs and expenses increased76.7% year over year to $40.8million in the quarter under review. The increase was due to higher selling, general and administrative, andresearch and development expenses.

The company reported an operating loss of $12.1 million against anoperating income of $24.4 million in the prior-year period.

Financial Details

As of Jul 31, 2021, AeroVironment’s cash and cash equivalents totaled $93.9 million compared with $148.7 million as of Apr 30, 2021.

Cash flow used in operating activities was $15.3 million at the end of first-quarter fiscal 2022, compared with cash flow provided from operating activities of $ 26.8 million in the prior-year period.

AeroVironment reported long-term debt (net of current maturities) of $185.1 million as of Jul 31, 2021, down from $187.5 million as of Apr 30, 2021.

2022 Guidance

AeroVironment reaffirmed its view for fiscal 2022. The company continues to expect non-GAAP earnings in the range of $2.50to$2.70 per diluted share. The Zacks Consensus Estimate for 2022 earningsispegged at $2.66 per share, which is above the mid-point of the company’s projected view.

The company anticipatesrevenues of $560-$580 million this year, unchanged from the previous guidance. The Zacks Consensus Estimate for fiscal 2022 revenuesstandsat $567.4 million, which is slightly below the mid-point of the company-guided range.

The company’s non- GAAP adjusted EBITDA is anticipated between $105million and $110 million.

Zacks Rank

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

Other Defense Releases

HEICO Corporation HEIreported third-quarter fiscal 2021 earnings of 56 cents, which surpassed the Zacks Consensus Estimate of 54 cents by 3.7%.

Hexcel Corporation HXLreported second-quarter 2021 adjusted earnings of 8 cents per share, which exceeded the Zacks Consensus Estimate of a penny by 700%.

Raytheon Technologies Corp.’s RTX second-quarter 2021 adjusted earnings per share of $1.03 per share outpaced the Zacks Consensus Estimate of 92 cents by 11.9%.

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