AeroVironment cut its fiscal-year guidance after government funding delays postponed orders in its latest quarter, hurting results.

"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," Chief Executive Wahid Nawabi said during a Tuesday call with analysts.

The drone maker also warned that one of its key contracts could be at risk. The company said the U.S. Space Force will likely reopen bidding for its Satellite Communications Augmentation Resource program, which makes up about half of AeroVironment's $3 billion unfunded backlog.

The company said it remains in active discussions regarding the contract but hasn't been able to come to a mutually agreed upon solution following a stop-work order, which triggered a non-cash $151 million goodwill impairment in the recent quarter.

Those dynamics led to worse-than-expected quarterly results and the fiscal-year guidance cut, the company said.

AeroVironment now expects adjusted earnings per share of $2.75 to $3.10 for the fiscal year, compared with $3.40 a share to $3.55 a share previously.

The company now projects fiscal-year revenue of $1.85 billion to $1.95 billion, compared to a prior forecast of $1.95 billion to $2 billion.

The stock slid 9.78% to $199.89 in after-hours trading.

However, Nawabi said AeroVironment continues to see strong demand for its products, in part because of recent tensions in the Middle East.

"The conflict in Iran is another example of how well we're positioned on the type of solutions that we've got," Nawabi said, pointing to a need for one-way attack drones and counter-unmanned aerial systems.

"I expect all this to convert to some additional demand in fiscal year 2027 and beyond," he added.

The company also said it expects to see continued growth as many of its products move from testing and evaluation to adoption by the U.S. military and its allies.

For the fiscal third quarter, AeroVironment posted a loss of $156.6 million, or $3.15 a share, compared with a loss of $1.8 million, or 6 cents a share, a year earlier. The recent quarter was hurt by goodwill impairment charges of $151.3 million, the company said.

Adjusted earnings per share were 64 cents, compared with estimates of 68 cents a share, according to analysts polled by FactSet.

Revenue more than doubled to $408 million, compared with analyst estimates of $475.5 million. The increase was driven by higher product and service revenue, which was boosted by the company's acquisition of BlueHalo in May.