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AeroVironment profit rises despite drop in drone sales

AeroVironment posts earnings that beat analysts' estimates. Drone sales fall but sales of charging systems for electric vehicles rise.

December 05, 2012|By W.J. Hennigan, Los Angeles Times
  • AeroVironment Chief Executive Timothy E. Conver said the decrease in drone sales was due, in part, to contracting delays and pending international orders that are working through the export administrative process.
AeroVironment Chief Executive Timothy E. Conver said the decrease in drone… (Al Seib, Los Angeles Times )

AeroVironment Inc., the Monrovia company that makes small spy drones and electric vehicle charging systems, posted second-quarter earnings of $8.7 million, or 39 cents a share, despite decreased sales of its robotic aircraft.

The results beat analysts' average estimate of 23 cents a share.

In the same period last year the company had a profit of $6.6 million, or 30 cents a share.

AeroVironment is the Pentagon's top supplier of small drones — including the Raven, Wasp and Puma models — that give troops on the ground a bird's-eye view of what's happening over a ridge or around a bend.

The company, which makes its drones in Simi Valley, said revenue decreased 0.1% to $80.3 million, compared with $80.4 million for the same quarter last year.

Drone sales for the quarter that ended Oct. 27 fell 2.2% to $65.4 million from $66.9 million in the same quarter last year.

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But sales of the company's charging systems for electric vehicles increased 10% to $14.8 million from $13.4 million a year earlier. In addition, the company said it spent $44.6 million, or 10% less than last year, on sales expenses.

In a conference call, AeroVironment Chief Executive Timothy E. Conver said the decrease in drone sales was due, in part, to contracting delays and pending international orders that are working through the export administrative process.

Because of this, "revenue in our second half will be more heavily weighted to our fourth quarter," he said.

AeroVironment largely depends on sales to the Pentagon, which is winding down its presence in the Middle East. But the company hopes to diversify its customer base in the coming years with the Federal Aviation Administration's impending introduction of small drones into U.S. airspace in 2015.

Currently, drones are not allowed to fly in the U.S. except with special permission from the FAA. But as interest in drones has increased among police departments and businesses, the agency has appeared willing to ease restrictions.

"We expect the use of unmanned airplane systems in domestic airspace by non-military organizations to become a large and a global market," Conver said. "The emerging market is very large. With about 18,000 police departments in the United States alone, the growth potential for our small [drones] is obvious."

On Monday, the company announced a deal with Sweden-based CybAero to develop and distribute larger helicopter drones. The relationship gives AeroVironment exclusive rights to provide CybAero systems to U.S. customers and government customers in other countries.

AeroVironment's results were reported after the close of regular trading Tuesday. Shares closed up 18 cents, or 0.9%, at $20.26.

william.hennigan@latimes.com

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