By CASSANDRA JARAMILLO
Drone maker AeroVironment Inc. saw revenue rise sharply, buoyed by increased sales of its unmanned aircrafts, though profit declined as the company boosted its spending in research and development.
Shares of AeroVironment rose 3.9% to $27.10 in after-hours trading as the company’s results handily topped Wall Street estimates.
AeroVironment makes drones and rechargeable-battery technology for electric vehicles. The company, founded in 1981, traces its roots to the Gossamer Condor, the first human-powered airplane developed by company founder Paul MacCready.
For the period ended April 30, AeroVironment reported a profit of $7.1 million, or 31 cents a share, down from $8.1 million, or 35 cents a share, in the previous year. Revenue rose 17.6% to $86.5 million.
Analysts polled by Thomson Reuters were expecting 18 cents a share on revenue of $85.7 million.
The company operates within two segments: its unmanned aircraft systems segment and its efficient energy systems segment. AeroVironment’s unmanned aircraft sales increased 31% to $78.7 million, while it saw a 42% decline to $7.7 million in its efficient energy systems.
The use of drones has been at the center of debate over air safety, privacy and regulation of U.S. skies. In February, the Federal Aviation Administration released provisions on small unmanned aircrafts weighing less than 55 pounds.
The provisions by the FAA require commercial drone operators to pass an approval process. Once approved, the safety requirements by the FAA limits commercial drone flights to below 500 feet, during daylight hours and within an operator’s line of sight.
For the fiscal 2016 year, the company said it expects to generate revenue between $260 million and $280 million. Analysts polled by Thomson Reuters had been projecting $277 million in revenue for fiscal 2016.
AeroVironment said it planned to increase its investments for commercial unmanned aircrafts, adding it may “largely offset operating profit in the current fiscal year.”
Write to Cassandra Jaramillo at [email protected]