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AeroVironment Falls 28% After Revenue Miss, Reduced Sales Outlook

Published 08/12/2021, 07:40 am
Updated 08/12/2021, 07:40 am
© Reuters.

© Reuters.

By Sam Boughedda

Investing.com — AeroVironment Inc (NASDAQ:AVAV) stock plunged 29% Tuesday on the back of its fiscal second-quarter 2022 results. Despite reporting earnings above expectations, the message from the company was one of cautiousness, with revenue failing to match or beat the consensus.

"While we achieved second quarter and first-half results in line with our expectations, headwinds to our business have intensified in recent months, requiring us to reduce our full year outlook," said Wahid Nawabi, AeroVironment president and CEO.

AeroVironment announced adjusted earnings per share of 78 cents on revenue of $122 million. Analysts polled by Investing.com anticipated an adjusted EPS of 62 cents on revenue of $130.83 million.

The defense contractor, primarily involved in unmanned aerial vehicles, has seen its shares continuously slide since February this year, with today's fall to $56.70, exacerbating the decline.

There had been concerns about the company's performance in recent months due to a change in the competitive landscape. However, in October, RBC Capital analyst told investors that those concerns were overdone.

One of, if not, the primary driver for today's share price fall is the company lowering its 2022 sales outlook to between $440 million and $460 million, from the previous $560 million to $580 million. Furthermore, its forecasted EPS for the period was also lowered to between $1.23 and $1.37 from $2.50 to $2.70.

Nawabi said it was based on "the negative impact from supply chain delays, extended procurement cycles due to the global COVID-19 pandemic, slower decision making in Washington tied to Continuing Resolution related budget uncertainties and staffing shortages have prevented us from realizing the growth and bottom line results expected at the start of this fiscal year. We are diligently working to manage expenses and other challenges in light of our revised outlook but are realistic regarding the lack of visibility within this ongoing environment."

However, AeroVironment's CEO remains confident the company is well-positioned to deliver long-term shareholder value.

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