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Northrop Grumman (NOC) Q2 Earnings Beat, ???18 EPS View Up
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Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2018 earnings of $3.93 per share, beating the Zacks Consensus Estimate of $3.83 by 2.6%. Reported earnings were also up 24.4% from $3.16 recorded in the year-ago quarter.
Total Revenues
In the second quarter, Northrop Grumman reported total revenues of $7.12 billion, beating the Zacks Consensus Estimate of $7 billion by 1.7%. Revenues also increased 10% from the year-ago figure of $6.47 billion. The revenue upside was primarily driven by an 11% increase in Aerospace systems sales.
Segmental Details
Aerospace Systems: Segment sales of $3.34 billion increased 11% year over year, driven by of higher volumes of manned aircraft programs. Strong autonomous systems and space sales also benefited this segment’s top line.
Operating income also rose 12% to $357 million, while operating margin was in line with the previous year’s margin.
Mission Systems: Segment sales rose 1% to $2.87 billion, due to higher sales volume of Sensors and Processing systems, as well as higher volume for Advanced Capabilities programs.
Operating income fell 8.3% to $352 million, while operating margin contracted 120 basis points (bps) to 12.2%.
Technology Services: Sales at this segment dropped 10% to $1.05 billion, primarily due to the completion of several programs, including JRDC. Also lower volume on the KC-10 program, which is nearing completion, hurt this unit’s top line.
Operating income decreased 24% to $95 million, while operating margin contracted 170 bps to 9.1%.
Operational Update
Total operating cost and expenses at the end of the quarter was $6.29 billion, up 12.43%.
Operating income during the quarter declined 5.7% to $0.82 billion.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman’s cash and cash equivalents as of Jun 30, 2018, were $1.54 billion, down from $11.22 billion as of Dec 31, 2017.
Long-term debt (net of current portion) as of Jun 30, 2018, was $14.38 billion, down from $14.39 billion as of 2017 end.
Net cash inflow from operating activities as of Jun 30, 2018, was $638 million compared with the year-ago figure of $68 million.
2018 Guidance
Northrop Grumman currently expects to generate revenues of $30 billion during 2018, in line with its earlier guidance.
On the bottom-line front, the company has raised its outlook. Northrop Grumman now expects to generate earnings in the range of $16.60-$16.85 per share compared with the earlier guidance range of $16.20-$16.45. Also, the company has changed its free cash flow guidance to the range of $2.4-$2.6 billion, from the earlier range of $2.3-$2.6 billion.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the prior-year figure of 67 cents.
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Northrop Grumman (NOC) Q2 Earnings Beat, ???18 EPS View Up
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2018 earnings of $3.93 per share, beating the Zacks Consensus Estimate of $3.83 by 2.6%. Reported earnings were also up 24.4% from $3.16 recorded in the year-ago quarter.
Total Revenues
In the second quarter, Northrop Grumman reported total revenues of $7.12 billion, beating the Zacks Consensus Estimate of $7 billion by 1.7%. Revenues also increased 10% from the year-ago figure of $6.47 billion. The revenue upside was primarily driven by an 11% increase in Aerospace systems sales.
Segmental Details
Aerospace Systems: Segment sales of $3.34 billion increased 11% year over year, driven by of higher volumes of manned aircraft programs. Strong autonomous systems and space sales also benefited this segment’s top line.
Operating income also rose 12% to $357 million, while operating margin was in line with the previous year’s margin.
Mission Systems: Segment sales rose 1% to $2.87 billion, due to higher sales volume of Sensors and Processing systems, as well as higher volume for Advanced Capabilities programs.
Operating income fell 8.3% to $352 million, while operating margin contracted 120 basis points (bps) to 12.2%.
Technology Services: Sales at this segment dropped 10% to $1.05 billion, primarily due to the completion of several programs, including JRDC. Also lower volume on the KC-10 program, which is nearing completion,
hurt this unit’s top line.
Operating income decreased 24% to $95 million, while operating margin contracted 170 bps to 9.1%.
Operational Update
Total operating cost and expenses at the end of the quarter was $6.29 billion, up 12.43%.
Operating income during the quarter declined 5.7% to $0.82 billion.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman Corporation Price, Consensus and EPS Surprise | Northrop Grumman Corporation Quote
Financial Condition
Northrop Grumman’s cash and cash equivalents as of Jun 30, 2018, were $1.54 billion, down from $11.22 billion as of Dec 31, 2017.
Long-term debt (net of current portion) as of Jun 30, 2018, was $14.38 billion, down from $14.39 billion as of 2017 end.
Net cash inflow from operating activities as of Jun 30, 2018, was $638 million compared with the year-ago figure of $68 million.
2018 Guidance
Northrop Grumman currently expects to generate revenues of $30 billion during 2018, in line with its earlier guidance.
On the bottom-line front, the company has raised its outlook. Northrop Grumman now expects to generate earnings in the range of $16.60-$16.85 per share compared with the earlier guidance range of $16.20-$16.45.
Also, the company has changed its free cash flow guidance to the range of $2.4-$2.6 billion, from the earlier range of $2.3-$2.6 billion.
Zacks Rank
Northrop Grumman currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Defense Releases
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the
prior-year figure of 67 cents.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>