News of an uninspiring quarter sent AeroVironment (AVAV -15.88%) investors heading for the exits earlier this week.
The exodus could have been more intense, however, had it not been for an encouraging report on the company’s industry posted the following morning. Regardless, the formerly high-flying stock had its wings clipped by the market — week to date as of Thursday night its share price was down almost 15%, according to data compiled by S&P Global Market Intelligence.
Revenue up, profitability down
AeroVironment, which specializes in combat drones, posted its fiscal second quarter of 2025 figures after market hours on Wednesday. It managed to boost its revenue by 4% to more than $188 million, in the period ended Oct. 26; however, its net income fell to under $7.5 million from the year-ago $17.8 million. On a non-GAAP (adjusted) per-share basis, the bottom-line number was $0.47, against second quarter 2024’s $0.97.
While the company handily beat the average analyst estimate of slightly over $177 million, it greatly whiffed on profitability — those pundits were collectively anticipating an adjusted net income of $0.69 per share.
Management proffered guidance for the current (third) quarter, stating that it expects $790 million to $820 million in revenue. That, however, is under the consensus analyst projection of $828 million. As for the bottom line, earnings per share (EPS) should land between $3.18 and $3.49; pundits tracking the stock are forecasting $3.38.
A promising segment
A ray of sunshine appeared in AeroVironment’s sky the following morning, in the form of a report from research firm Insight Partners concerning drone land surveying. The firm singled out a clutch of businesses poised to benefit from this activity, and the list included AeroVironment.
According to Insight’s modeling, this segment is expected to total nearly $12.6 billion within the next few years, representing growth of more than 50% over the 2022 tally.
In the researcher’s view, “The increasing demand for land survey equipment in construction, renewable energy, mining, oil and gas, forestry, precision farming, disaster management, and transportation industries, as well as in scientific and geological research and utilities, drives the market.”
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AeroVironment. The Motley Fool has a disclosure policy.
