Will Higher Marketing Expenses Hurt AeroVironment Q3 Earnings?

Core Viewpoint - AeroVironment, Inc. (AVAV) is expected to report its third-quarter fiscal 2025 results on March 4, 2025, after market close, with a projected revenue growth despite higher expenses impacting earnings [1][6]. Revenue Segments - The Loitering Munitions Systems (LMS) segment is anticipated to show strong sales, with quarterly revenues estimated at $92.3 million, reflecting a 60$21.1 million, indicating a 35% growth compared to the same quarter last year [4]. - Conversely, the Uncrewed Systems (UxS) unit is likely to report disappointing figures due to declining product shipments and lower international sales, particularly to Ukraine [5]. Overall Financial Expectations - The overall revenue for AeroVironment in the fiscal third quarter is estimated at $189.3 million, suggesting a 1.4% increase from the previous year [6]. - Despite solid revenue projections, increased sales and marketing expenses, along with higher employee-related costs, may negatively impact operating margins and overall earnings [7]. - The earnings consensus estimate is set at 58 cents per share, indicating a decline of 7.9% from the prior year's figure [8]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for AeroVironment, as the Earnings ESP stands at 0.00% [9]. - AeroVironment holds a Zacks Rank 1 (Strong Buy), indicating a favorable outlook despite the earnings prediction challenges [10].