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AeroVironment revenue plunges 51% in fourth quarter

A decline in small-drone sales to the Pentagon takes a toll on the Monrovia firm, which posts a loss of $795,000, compared with a profit of $17.8 million a year earlier.

June 26, 2013|By W.J. Hennigan, Los Angeles Times
  • AeroVironment Chief Executive Timothy E. Conver attributed the drop in drone sales to delayed government purchases. The company expects those purchases to be made during the next fiscal year.
AeroVironment Chief Executive Timothy E. Conver attributed the drop in… (Al Seib, Los Angeles Times )

Stung by a downturn in drone sales to the military, AeroVironment Inc. saw its revenue drop in half during the fourth quarter from a year earlier.

The Monrovia company had revenue of $54.1 million, compared with $110.7 million in last year's fourth quarter.

AeroVironment depends largely on funding from the Pentagon, which is winding down its presence in the Middle East and preparing for budget cuts. The company 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.

Drone sales for the fourth quarter, which ended April 30, fell 56.4% to $42.4 million from $97.3 million in the same quarter last year.

AeroVironment reported a net loss of $795,000, or 4 cents a share. That compares with a profit of $17.8 million, or 80 cents a share, a year earlier.

The company still beat the expectations of analysts, who on average had forecast a loss of 10 cents a share.

The results were reported after the close of regular trading Tuesday, when AeroVironment shares rose 22 cents, or 1.1%, to $19.58. After the market closed, they were up $1.42, or 7%, to $21.

In a conference call, AeroVironment Chief Executive Timothy E. Conver attributed the drop in drone sales to delayed government purchases. The company believes it will receive those sales during the next fiscal year along with new opportunities.

AeroVironment has been developing a high-endurance spy drone, the Global Observer, that can fly at 65,000 feet for a week at a time. The first version of the plane, much larger than the hand-launched planes the firm is known for, crashed at Edwards Air Force Base in 2011.

Conver sees the Global Observer opening new business markets and said a second drone for test flight is 90% complete.

"We have a proven history of adapting to an ever-changing environment while continuously innovating to help customers succeed," he said. "Our fiscal 2014 plan is designed to maintain our market leadership in the Department of Defense."

For fiscal 2013, AeroVironment had a net income of $10.4 million, down sharply from $30.4 million in fiscal 2012. The company's stock is down nearly 10% this year.

AeroVironment, which makes small spy drones in Simi Valley, hopes to diversify its customer base in the coming years with the Federal Aviation Administration's impending introduction of regulations allowing 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.

AeroVironment also makes charging systems for electric vehicles. Revenue in that business fell in the quarter more than 12% to $11.7 million from $13.3 million a year earlier.

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