06:30 AM EDT, 03/11/2026 (MT Newswires) -- AeroVironment ( AVAV ) shares fell early Wednesday after the drone maker lowered its full-year outlook and reported fiscal third-quarter results below market expectations.

The company now anticipates adjusted earnings to be in a range of $2.75 to $3.10 per share for fiscal 2026, it said late Tuesday, down from its previous guidance of $3.40 to $3.55. Revenue is pegged at $1.85 billion to $1.95 billion, compared with the prior forecast of $1.95 billion to $2 billion. The current consensus on FactSet is for non-GAAP EPS of $3.22 and sales of $1.95 billion.

Shares of the firm fell 9.4% in the most recent premarket activity. The stock has lost 8.4% so far this year.

For the three months through January, AeroVironment's ( AVAV ) adjusted EPS increased to $0.64 from $0.30, but fell short of the Street's view for $0.68. Revenue surged 143% to $408 million, but trailed the average analyst estimate of $475.5 million.

"This past quarter's results came in below expectations primarily driven by revenue timing and adjustments made in our space business," Chief Executive Wahid Nawabi said during an earnings call, according to a FactSet transcript. "Given industry-wide delays in government funding along with the shutdown, several orders we anticipated to receive in the third quarter have shifted to the right by a quarter or two."

The federal government shutdown lasted for a record 43 days between October and November.

The topline reflected higher product sales and service revenue of $138.1 million and $102.3 million, respectively, with the acquisition of defense technology company BlueHalo contributing $85.1 million and $91.4 million. The company completed BlueHalo's acquisition in May last year.

By segment, autonomous systems recorded revenue of $278.7 million, up from $223.4 million in the prior-year quarter, according to an earnings presentation. The space, cyber and directed energy division saw revenue decline to $129.3 million from $160 million, "following the stop work order on the space (satellite communications augmentation resource) program and the US government funding delays," Chief Financial Officer Kevin McDonnell said on the call.

As of Jan. 31, the company's funded backlog stood at $1.1 billion versus $726.6 million at the end of April 2025. "Strong order flow increased our funded backlog in the third quarter, which is positioning us for record fourth-quarter revenue and a solid start to our fiscal year 2027," according to Nawabi.