** AeroVironment's AVAV.O shares down 13.1% at $171.10 premarket after military drone maker's qtrly profit misses expectations

** Stock could suffer biggest one-day pct drop since May 25, 2023, if losses hold

** Arlington, Virginia based firm late Weds posted fiscal Q2 adj EPS of 47 cents, well below avg analysts' estimate of 72 cents, per LSEG

** Co reported income from operations of $7 mln declined from $25.2 mln a yr-ago, citing increase in SG&A expense of $9.8 mln, including $2.5 mln in acquisition related expenses and $6.7 mln R&D expense

** Last month, AVAV said it would acquire space and defense engineering firm BlueHalo in all-stock deal valued around $4.1 bln to expand its offerings

** Rev in qtr rose 4% y/y to $188.5 mln, topping LSEG view of $182.9 mln

** Co reaffirmed prior fiscal 2025 outlook for rev of $790-$820 mln and adj EPS of $3.18-$3.49

** BTIG reiterates 'buy' rating on and sticks with $245 PT, saying demand for co's Switchblade systems is "more than enough to offset any lost Ukraine sales"

** Despite reporting "lackluster" earnings, BTIG says, "the backdrop remains robust" heading into second half of year, "with 95% visibility to the FY2025 sales range"

** In Sept, AVAV shares went on a roller coaster ride after the U.S. Army suspended, then lifted stop work order related to Switchblade after a protest was filed with U.S. Government Accountability Office (GAO), challenging Army's decision to award nearly $1 bln contract to AVAV on a sole source basis

** Through Weds close, stock up 56% YTD, following 47% gain in 2023

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))