06:37 AM EST, 03/05/2024 (MT Newswires) -- AeroVironment ( AVAV ) shares climbed early Tuesday as the drone maker lifted its full-year outlook on the back of a stronger-than-expected fiscal third quarter.

Adjusted earnings are now set to come in between $2.69 and $2.83 a share for fiscal 2024, the company said late Monday, compared with its previous projections of $2.46 to $2.70. Revenue is pegged at $700 million to $710 million, up from the prior forecast range of $685 million to $705 million. The consensus on Capital IQ is for normalized EPS of $2.78 on revenue of $706.7 million.

Shares of the company have gained about 4% so far this year and surged 19% in premarket trading.

"With the increased global demand for our solutions, strong backlog and growing pipeline, AeroVironment ( AVAV ) remains well positioned for continued growth," Chief Executive Wahid Nawabi said in a statement. The firm continues to anticipate double-digit revenue growth for fiscal 2025, he added.

For the three months through Jan. 27, adjusted earnings increased to $0.63 from $0.33, topping the Street's view for $0.34. Revenue surged 39% to $186.6 million, ahead of analysts' $172.1 million estimate. The topline reflected a $64.7 million increase in product sales, partially offset by a $12.5 million decrease in service revenue.

Unmanned systems revenue advanced 23% to $113.3 million, according to an investor presentation. The division is a combination of AeroVironment's ( AVAV ) small unmanned aircraft systems, medium unmanned aircraft systems, unmanned ground vehicles and the recently acquired Tomahawk businesses, Chief Financial Officer Kevin McDonnell said on a conference call, according to a Capital IQ transcript.

The loitering munitions systems unit logged revenue growth of 140% to $57.7 million, with a "little more than half" of the gains coming from the company's Switchblade 600 products and services, McDonnell told analysts. Revenue in the MacCready Works business declined 13% to $15.6 million.

"The MacCready Works segment's growth has been muted because of the delays in establishing a government year 2024 budget," McDonnell said on the call. However, the company did see robust demand for its machine learning and autonomy capabilities.

Gross margin for the quarter improved to 36% from 34% in the 2022 quarter, according to the company. As of Jan. 27, the company's funded backlog stood at $462.8 million versus $424.1 million at the end of April 2023.

Price: 155.67, Change: +25.02, Percent Change: +19.15