AeroVironment Inc. (NASDAQ: AVAV) experienced a sharp decline of 9.74% in extended trading on Tuesday, following the release of its fiscal third-quarter financial results.

The drone maker reported quarterly adjusted earnings per share of $0.64, missing the analyst consensus estimate of $0.69. Revenue for the quarter was $408 million, significantly below the expected $475.6 million. Furthermore, the company recorded a substantial non-cash goodwill impairment charge of $151.3 million related to a stop-work order on a key U.S. Space Force contract, the Satellite Communications Augmentation Resource (SCAR) program.

Adding to investor concerns, AeroVironment significantly lowered its full-year fiscal 2026 guidance. The company now expects adjusted earnings per share in the range of $2.75 to $3.10, down from a prior forecast of $3.40 to $3.55 and below analyst estimates. Revenue guidance was also reduced to $1.85 billion to $1.95 billion. Management cited revenue timing issues, adjustments in its Space business, and delays in government funding which postponed several anticipated orders.