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AeroVironment (AVAV) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

AeroVironment, Inc. AVAV is set to release first-quarter fiscal 2020 results on Sep 4, 2019 after market close.

In the last reported quarter, the company delivered a positive earnings surprise of 4%. Also, it has an average four-quarter earnings surprise of 279.65%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

The company expects to benefit from nearly 5% ownership of the HAPSMobile joint venture. As of Apr 30, ending funded backlog in fourth-quarter fiscal 2019 was $164.3 million that is expected to be executed in fiscal 2020. The tactical missile systems and small UAS are likely to drive AeroVironment’s growth in fiscal 2020.

However, the company expects to incur loss from Pulse Aerospace acquisition that was made in June 2019. AeroVironment also expects to generate lower gross margins in fiscal 2020 due to a shift in revenue mix.

The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $85.25 million, which indicates 9.24% improvement year over year. However, estimate for fiscal first-quarter earnings is pegged at 35 cents that suggests a decline of 40.68% on a year-over-year basis.

Earnings Whispers

Our proven model does not conclusively show that AeroVironment is likely to beat estimates in the quarter to be reported. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you see below.

AeroVironment, Inc. Price and EPS Surprise

 

AeroVironment, Inc. Price and EPS Surprise

AeroVironment, Inc. price-eps-surprise | AeroVironment, Inc. Quote

 

Earnings ESP: AeroVironment has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AeroVironment currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Defense Releases

Textron Inc TXT reported second-quarter 2019 earnings from continuing operations of 93 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 9.4%.

Lockheed Martin Corp LMT delivered second-quarter 2019 earnings of $5 per share, which outpaced the Zacks Consensus Estimate of $4.74 by 5.5%.

Northrop Grumman Corporation NOC reported second-quarter 2019 earnings of $5.06 per share, which exceeded the Zacks Consensus Estimate of $4.64 by 9%.

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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
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