Electro Optic Systems Holdings Ltd (ASX: EOS) shares are plunging in morning trade after the company's latest quarterly update was released. At the time of writing, the Electro Optic share price is trading at $4.80, down 5.14%.
Let's take a look at how the Aussie technology company has been performing.
Why has the Electro Optic share price dipped?
Electro Optic shares are on the slide today despite the company reporting "considerable progress" in consolidating and progressing key results from 2020. This included new personnel as EOS pushes to become a sovereign Australian prime contractor. Mr David Black joined the board as an independent non-executive director while Mr Michael Lock was appointed CFO in March.
The company reportedly made "strong progress" both in Australia and internationally in its defence systems segment. EOS is now engaged in several programs with the Commonwealth of Australia.
Electro Optic expects to deliver the balance of its September 2020 contract for 251 remote weapon systems (RWA) by Q3 2021. That will bring the number of EOS RWS in service with the Commonwealth of Australia to 530 units.
Meanwhile, Hanwha Defence Australia (HDA) has engaged EOS to provide T2000 turrets for three Redback vehicles undergoing customer evaluation in 2021. EOS is the turret provider for Redback and the preferred supplier for the RWS component.
The Electro Optic share price is not responding positively despite the company providing an update on its C4Edge program involvement. The program has achieved all contract milestones on time and on budget. EOS said this success has led to further expansion of the C4Edge team with another three Australian industry partners added.
EOS also reported, "significant progress" in the Middle East, Europe and the US. This includes a "severely disrupted" major delivery contract in the Middle East impacted by COVID-19. EOS also expects an order in mid-2021 from a NATO member for RWS for remotely operated combat vehicles.
What about other business segments?
There was a continued focus on research and development (R&D) activities in Electro Optic's space systems segment. This included a "major breakthrough" in laser technology in April which significantly advances the global effort to mitigate space debris.
Electro Optic Systems also reported a strong start to 2021 in its communications systems segment. That includes current-year revenue and EBIT at record levels for its EM Solutions subsidiary. EOS' US-based subsidiary, SpaceLink, is also on track to meet its June 2024 regulatory deadline to "bring into use" its extensive spectrum allocation for space communications.
Foolish takeaway
The Electro Optic share price is sinking this morning following the company's latest quarterly update. Shares in the Aussie technology group are down by around 19% in 2021 with a $762.9 million market capitalisation.
