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Will Segmental Sales Growth Boost Northrop Stock's Q4 Earnings?

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Northrop Grumman Corporation (NOC - Free Report) is scheduled to report fourth-quarter 2024 results on Jan. 30, before market open.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The company delivered a four-quarter average earnings surprise of 9.91%. The strong revenue performance across three of its segments is likely to have contributed to its earnings.

Aeronautics Systems to Boost the Top Line

Higher F-35 production volume, increased E-2 fleet sustainment and modernization work, higher Triton LRIP production volume and an increase in Global Hawk sustainment activities are likely to have boosted the fourth-quarter revenue performance of the Aeronautics Systems segment.

The Zacks Consensus Estimate for the segment’s revenues is pegged at $3,199.4 million, indicating a rise of 9.9% from the year-ago quarter’s figure.

Defense Systems Reflects Solid Growth Potential

Higher sales volumes from the Sentinel program and international ammunition sales, as well as ramp-up on the Stand-in Attack Weapon program, are likely to have aided the Defense unit’s revenue performance.

The Zacks Consensus Estimate for Defense Systems’ revenues is pegged at $2,584.4 million, indicating an increase of 57.1% from the year-ago quarter’s number.

Mission Systems to Remain Solid

Higher sales volume from restricted advanced microelectronics programs, as well as advanced technology programs, is expected to have favorably impacted Mission Systems’ revenue performance.

The Zacks Consensus Estimate for Mission System’s fourth-quarter revenues is pegged at $3,238.4 million, indicating growth of 5.7% from the year-ago quarter’s actual.

Space Systems to Reflect Dismal Performance

The Space System segment’s revenues are likely to have been adversely impacted primarily due to the wind-down of the company’s work on the restricted space and NGI programs.

The Zacks Consensus Estimate for Space System’s revenues is pegged at $2,741 million, implying a decrease of 23.9% from the year-ago quarter’s number.

Backlog Projections

Our model estimates NOC’s fourth-quarter backlog to decline 3% year over year to $81.71 billion.

Q4 Estimates

With three of NOC’s segments likely to report a year-over-year improvement in sales, one can be optimistic about its top-line results.

The Zacks Consensus Estimate for sales is pegged at $11.03 billion, indicating an increase of 3.7% from the prior-year figure.

A solid top-line improvement in three of its business segments, along with favorable operating margin performance expected from the Defense Systems and Mission Systems units, is likely to have aided the overall earnings of Northrop. However, unfavorable operating margin performance expected from the Aeronautics Systems and Space Systems business segments is likely to have offset the benefits.

The Zacks Consensus Estimate for earnings is pegged at $6.27 per share, which is in line with the prior-year figure.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for NOC this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as you will see below.

Earnings ESP: NOC has an Earnings ESP of +1.37%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: NOC currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Below we have mentioned the following players from the same sector that also have the right combination of elements to beat on earnings in the upcoming releases.

Leidos Holdings, Inc. (LDOS - Free Report) is set to report fourth-quarter 2024 earnings on Feb. 11, 2025, before market open. It has an Earnings ESP of +12.08% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for LDOS’ earnings is pegged at $2.18 per share. The consensus estimate for its sales is pegged at $4.12 billion, indicating year-over-year growth of 3.6%.

Huntington Ingalls Industries, Inc. (HII - Free Report) is set to report its fourth-quarter 2024 results on Feb. 6, before market open. It has an Earnings ESP of +8.35% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for HII’s earnings is pegged at $3.28 per share. The consensus estimate for its sales is pegged at $3.03 billion.

CurtissWright (CW - Free Report) is set to report its fourth-quarter results on Feb. 12, after market close. It has an Earnings ESP of +1.24% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for CW’s earnings is pegged at $3.08 per share. The consensus estimate for its sales is pegged at $785.5 million.

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