AeroVironment (AVAV) Crushed 25% After Poor Earnings

AeroVironment (AVAV) isn’t being treated all that well by traders in after hours trading. The company missed by a wide margin on both EPS, reporting .06 lower than analyst estimates at .21/share (a 25% haircut over the year ago quarter) and on revenues, reporting just $52.2 million in the quarter.  That was $13 million lower than expectations and just an 8% bump over the year ago quarter.  Needless to say the stock is getting punished after hours to the tune of more than 25%.  I’ve said it many times before at Self Investors and I’ll say it again here.. if you’re going to hold a small to mid cap growth stock through earnings (particularly in this market environment) you better have a big profit cushion going in.  There is just too much risk and uncertainty.

If missing badly on this quarter weren’t enough, AVAV is slashing revenue growth in half for 2009 from the anticipated growth of 20 – 25% to 11 – 16%.

“In our fiscal third quarter we continued to supply our innovative solutions to existing and new customers while achieving great progress on our development programs. The strong order flow generated in the quarter produced record funded backlog, indicating continued demand for our solutions,” said Tim Conver, Chairman and Chief Executive Officer. “Even with our backlog, our view of the balance of the year requires that we lower our revenue outlook for fiscal 2009. This is driven largely by current economic conditions as well as the timing of the receipt and shipment of customer orders, and does not reflect a fundamental change in our long-term view of the demand for our solutions, the relevance of our development programs or the soundness of our business model.”

Tomorrow, AVAV is going to take out support around 25.  If it can’t reclaim that level of support by the end of the day look for it to eventually test all time lows in the 18 – 19 range. 

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