Northrop Grumman Corporation (NOC - Free Report) is scheduled to release fourth-quarter and 2017 results on Jan 25, before the opening bell.
Lack of orders from Pentagon as well as international allies of the United States may hamper the company’s fourth quarter sales growth. Moreover, the Aerospace Systems segment is not likely to be a major
support for Northrop Grumman this time around.
Let’s discuss the factors influencing the defense giant’s quarterly release.
Will Aerospace Systems Remain the Key Contributor?
The Aerospace Systems segment fetches almost half of Northrop Grumman’s sales and has traditionally been a primary contributor to growth.
Usually, increased demand as well as deliveries of manned aircraft boosts sales at this segment. However, the segment managed to clinch very few contracts in the fourth quarter.
This is reflected in the Zacks Consensus Estimate for the segment’s Q4 revenues, which stands at $2,861 million, reflecting an annual decline of 0.4%.
Lack of Orders to Impact Sales
Defense majors have been receiving a slew of contracts from the Pentagon and foreign U.S. allies, Northrop Grumman being no exception. However, in the fourth quarter, the company won a handful of notable
deals only like the $445-million Air Force contract to support LAIRCM program.
Consequently, the Q4 revenue growth expectation is not very ambitious. The Zacks Consensus Estimate for sales is pegged at $6.37 billion, reflecting a 0.4% year-over-year decline.
Other Factors to Consider
The Mission Systems business has been benefiting from increased volume for sensors and processing programs along with air and missile defense programs and Advanced Capabilities business. Considering a
continuation of this trend in the final quarter of the year as well, Northrop Grumman had slightly lifted the 2017 sales expectation for this unit during the third-quarter earnings call.
Taking this into consideration, the Zacks Consensus Estimate for the unit’s Q4 revenues is pegged at $2,906 million, reflecting annual growth of 2.1%.
Meanwhile, unallocated corporate expenses rose $90 million in the third quarter, primarily on account of the Orbital ATK acquisition. As the transaction is still on track, we expect the company to incur higher
unallocated corporate expenses in the fourth quarter as well.
Northrop Grumman Corporation Price and EPS Surprise
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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.
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Northrop Grumman Corporation (NOC - Free Report) is scheduled to release fourth-quarter and 2017 results on Jan 25, before the opening bell.
Lack of orders from Pentagon as well as international allies of the United States may hamper the company’s fourth quarter sales growth. Moreover, the Aerospace Systems segment is not likely to be a major
support for Northrop Grumman this time around.
Let’s discuss the factors influencing the defense giant’s quarterly release.
Will Aerospace Systems Remain the Key Contributor?
The Aerospace Systems segment fetches almost half of Northrop Grumman’s sales and has traditionally been a primary contributor to growth.
Usually, increased demand as well as deliveries of manned aircraft boosts sales at this segment. However, the segment managed to clinch very few contracts in the fourth quarter.
This is reflected in the Zacks Consensus Estimate for the segment’s Q4 revenues, which stands at $2,861 million, reflecting an annual decline of 0.4%.
Lack of Orders to Impact Sales
Defense majors have been receiving a slew of contracts from the Pentagon and foreign U.S. allies, Northrop Grumman being no exception. However, in the fourth quarter, the company won a handful of notable
deals only like the $445-million Air Force contract to support LAIRCM program.
Consequently, the Q4 revenue growth expectation is not very ambitious. The Zacks Consensus Estimate for sales is pegged at $6.37 billion, reflecting a 0.4% year-over-year decline.
Other Factors to Consider
The Mission Systems business has been benefiting from increased volume for sensors and processing programs along with air and missile defense programs and Advanced Capabilities business. Considering a
continuation of this trend in the final quarter of the year as well, Northrop Grumman had slightly lifted the 2017 sales expectation for this unit during the third-quarter earnings call.
Taking this into consideration, the Zacks Consensus Estimate for the unit’s Q4 revenues is pegged at $2,906 million, reflecting annual growth of 2.1%.
Meanwhile, unallocated corporate expenses rose $90 million in the third quarter, primarily on account of the Orbital ATK acquisition. As the transaction is still on track, we expect the company to incur higher
unallocated corporate expenses in the fourth quarter as well.
Northrop Grumman Corporation Price and EPS Surprise
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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