Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2016 adjusted earnings of $2.60 per share, beating the Zacks Consensus Estimate of $2.50 by 4%. Reported earnings were also up 5.3% from $2.47 recorded in the year-ago quarter.
Excluding after-tax pension adjustments, earnings came in at $2.85 per share, up 4% year over year.
Total Revenue
In the second quarter of 2016, Northrop Grumman reported total revenue of $6,000 million, missing the Zacks Consensus Estimate of $6,071 million by 1.7%. Revenues, however, increased from the year-ago figure of $5,896 million by 1.8%.
Quarterly Segmental Details
Aerospace Systems: Segment sales of $2.6 billion increased 4.1% year over year on the back of higher volumes for the manned aircraft and autonomous systems programs.
Operating income, however, dropped 2.2% to $312 million, while operating margin contracted 80 basis points (bps) to 12% due to a less favorable performance of the manned aircraft.
Mission Systems: Segment sales were up 2.4% to $2.69 billion due to lower volumes for the Advanced Capabilities programs, as well as the Sensors and Processing programs.
Operating income also inched up 0.9% to $351 million, while operating margin shrank 20 bps to 13%.
Technology Services: Sales at the segment were $1.21 billion, down 2%. The decrease was primarily due to lower volumes of the Advanced Defense Services (ADS) programs.
Operating income rose 2.3% to $131 million, while operating margin expanded 50 bps to 10.8%.
Operational Update
Total operating cost and expenses in the second quarter were $5.2 billion, up 2.4%.
Operating income during the quarter fell 2% to $0.8 billion.
Financial Condition
Northrop Grumman’s cash and cash equivalents as of Jun 30, 2016 were $1.14 billion, compared with $2.32 billion as of Dec 31, 2015.
Long-term debt (net of current portion) as of Jun 30, 2016 was $6.39 billion, almost in line with the figure as of Dec 31, 2015.
Net cash from operating activities in first half of 2016 was $544 million, compared with an outflow of $28 million in the year-ago period.
2016 Guidance
Northrop Grumman reiterated its revenue expectations in the band of $23.5 billion to $24.0 billion.
The company raised its guidance for diluted earnings per share to the range of $10.75–$11.00 from the prior projection of $10.40–$10.70.
Further, the company reiterated its free cash flow guidance of $1.5–$1.8 billion.
Other Aerospace & Defense Releases
Rockwell Collins Inc. reported results for third-quarter fiscal 2016 ended Jun 30. The company’s adjusted earnings per share of $1.63 surpassed the Zacks Consensus Estimate of $1.59 by 2.5%. Reported earnings also improved 22.6% from $1.33 a year ago.
Textron Inc. (TXT - Free Report) reported second-quarter 2016 earnings from continuing operations of 66 cents per share, beating the Zacks Consensus Estimate of 63 cents by 4.8%. Earnings were also up 10% from 60 cents reported in the year-ago quarter.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2016 earnings of $3.32 per share, surpassing the Zacks Consensus Estimate of $2.92 by 13.7%. Earnings also increased 12.9% from the year-ago level.
Zacks Rank
Northrop currently has a Zacks Rank #2 (Buy).
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Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2016 adjusted earnings of $2.60 per share, beating the Zacks Consensus Estimate of $2.50 by 4%. Reported earnings were also up 5.3% from $2.47 recorded in the year-ago quarter.
Excluding after-tax pension adjustments, earnings came in at $2.85 per share, up 4% year over year.
Total Revenue
In the second quarter of 2016, Northrop Grumman reported total revenue of $6,000 million, missing the Zacks Consensus Estimate of $6,071 million by 1.7%. Revenues, however, increased from the year-ago figure of $5,896 million by 1.8%.
Quarterly Segmental Details
Aerospace Systems: Segment sales of $2.6 billion increased 4.1% year over year on the back of higher volumes for the manned aircraft and autonomous systems programs.
Operating income, however, dropped 2.2% to $312 million, while operating margin contracted 80 basis points (bps) to 12% due to a less favorable performance of the manned aircraft.
Mission Systems: Segment sales were up 2.4% to $2.69 billion due to lower volumes for the Advanced Capabilities programs, as well as the Sensors and Processing programs.
Operating income also inched up 0.9% to $351 million, while operating margin shrank 20 bps to 13%.
Technology Services: Sales at the segment were $1.21 billion, down 2%. The decrease was primarily due to lower volumes of the Advanced Defense Services (ADS) programs.
Operating income rose 2.3% to $131 million, while operating margin expanded 50 bps to 10.8%.
Operational Update
Total operating cost and expenses in the second quarter were $5.2 billion, up 2.4%.
Operating income during the quarter fell 2% to $0.8 billion.
Financial Condition
Northrop Grumman’s cash and cash equivalents as of Jun 30, 2016 were $1.14 billion, compared with $2.32 billion as of Dec 31, 2015.
Long-term debt (net of current portion) as of Jun 30, 2016 was $6.39 billion, almost in line with the figure as of Dec 31, 2015.
Net cash from operating activities in first half of 2016 was $544 million, compared with an outflow of $28 million in the year-ago period.
2016 Guidance
Northrop Grumman reiterated its revenue expectations in the band of $23.5 billion to $24.0 billion.
The company raised its guidance for diluted earnings per share to the range of $10.75–$11.00 from the prior projection of $10.40–$10.70.
Further, the company reiterated its free cash flow guidance of $1.5–$1.8 billion.
Other Aerospace & Defense Releases
Rockwell Collins Inc. reported results for third-quarter fiscal 2016 ended Jun 30. The company’s adjusted earnings per share of $1.63 surpassed the Zacks Consensus Estimate of $1.59 by 2.5%. Reported earnings also improved 22.6% from $1.33 a year ago.
Textron Inc. (TXT - Free Report) reported second-quarter 2016 earnings from continuing operations of 66 cents per share, beating the Zacks Consensus Estimate of 63 cents by 4.8%. Earnings were also up 10% from 60 cents reported in the year-ago quarter.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2016 earnings of $3.32 per share, surpassing the Zacks Consensus Estimate of $2.92 by 13.7%. Earnings also increased 12.9% from the year-ago level.
Zacks Rank
Northrop currently has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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