Stifel Remains Sidelined on AeroVironment (AVAV) Following 1Q Report
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Stifel reiterated a Hold rating on AeroVironment (NASDAQ: AVAV) following the company's 1Q earnings report. AV took a $1.8m charge in 1Q to account for higher warranty costs. Management indicated that, excluding the higher warranty costs in 1Q, results were largely in line with expectations.
Analyst Joseph DeNardi commented, "AV reported an EPS loss of $0.51 vs. our estimate for a $0.10 loss with the difference largely due to lower gross margins at both segments and higher SG&A and R&D. While the latter may be more a function of timing than anything to worry about, the gross margin miss was due in part to higher warranty costs associated with prior small UAS deliveries which is a concern. Management maintained guidance despite the lower than expected EPS in the quarter without providing much detail around what's expected to offset that through the year. In addition, the company cited softer bookings activity in the quarter which will result in results being more heavily weighted to F4Q than previously expected. As a result, we now see increased risk to guidance for the full year and are lowering estimates as a result."
Shares of AeroVironment closed at $29.79 yesterday.
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