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Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2019 earnings of $5.06 per share, which surpassed the Zacks Consensus Estimate of $4.64 by 9%. The bottom line also increased 12% from $4.50 reported in the year-ago quarter.
Total Sales
In second-quarter 2019, Northrop Grumman reported total sales of $8,456 million, which surpassed the Zacks Consensus Estimate of $8,401 million by 0.7%. Sales also increased 19% from the year-ago quarter’s $7,119 million. The upside was primarily driven by solid single-digit increase in the Mission Systems’ sales.
Segmental Details
Aerospace Systems: Sales at this segment totaled $3,390 million, up 2% year over year. This improvement was backed by increased sales due to higher volumes of Manned Aircraft and Space programs.
Operating income rose 1% to $361 million, whereas operating margin contracted 10 basis points (bps) to 10.6%.
Mission Systems: Segment sales increased 9% to $3,128 million on higher sales in Cyber and ISR, Advanced Capabilities, and Sensors and Processing business areas.
Operating income rose 15.9% to $408 million while operating margin expanded 80 bps to 13%.
Technology Services: Sales at this segment dipped 0.4% to $1,044 million, owing to lower Global Services sales.
Operating income increased 19% to $113 million, with operating margin expansion of 170 bps to 10.8%.
Innovation Systems: Second-quarter 2019 sales in this segment increased 8% to $1,498 million compared with proforma sales of $1,400 million in the second quarter of 2018. The increase was principally due to higher sales at Flight Systems and Defense Systems.
Meanwhile, the segment’s operating income totaled $169 million and operating margin expanded 150 bps to 11.3%.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Total operating costs and expenses at the end of the quarter were $7,510 million, up 19.2% from the year-ago quarter’s $6,302 million.
Operating income during the quarter increased 15.8% to $946 million.
Financial Condition
Northrop Grumman’s cash and cash equivalents as of Jun 30, 2019, were $1,088 million, down from $1,579 million as of Dec 31, 2018.
Long-term debt (net of current portion) as of Jun 30, 2019, was $13,838 million, down from $13,883 million as of Dec 31, 2018.
Net cash inflow from operating activities as of Jun 30, 2019, was $694 million compared with $638 million as of Jun 30, 2018.
2019 Guidance
Northrop Grumman expects to generate revenues of $34 billion during 2019. The Zacks Consensus Estimate for the company’s full-year sales, pegged at $33.91 billion, lies below its projected view.
It continues to project free cash flow of $2.6-$3 billion for 2019.
However, Northrop Grumman raised its full-year earnings expectations from $18.90-$19.30 to $19.30-$19.55 per share. The Zacks Consensus Estimate for the company’s 2019 earnings, pegged at $19.41, lies slightly below the mid-point of the company’s guidance.
Textron Inc. (TXT - Free Report) reported second-quarter 2019 earnings from continuing operations of 93 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 9.4%. The bottom line also increased 6.9% from 87 cents in the year-ago quarter.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2019 earnings of $5 per share, which surpassed the Zacks Consensus Estimate of $4.74 by 5.5%. The bottom line also improved 23.5% from $4.05 in the year-ago quarter.
Upcoming Defense Releases
Raytheon Company is scheduled to report second-quarter 2019 results on Jul 25.
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Northrop Grumman (NOC) Beats on Q2 Earnings, Ups '19 EPS View
Northrop Grumman Corporation (NOC - Free Report) reported second-quarter 2019 earnings of $5.06 per share, which surpassed the Zacks Consensus Estimate of $4.64 by 9%. The bottom line also increased 12% from $4.50 reported in the year-ago quarter.
Total Sales
In second-quarter 2019, Northrop Grumman reported total sales of $8,456 million, which surpassed the Zacks Consensus Estimate of $8,401 million by 0.7%. Sales also increased 19% from the year-ago quarter’s $7,119 million. The upside was primarily driven by solid single-digit increase in the Mission Systems’ sales.
Segmental Details
Aerospace Systems: Sales at this segment totaled $3,390 million, up 2% year over year. This improvement was backed by increased sales due to higher volumes of Manned Aircraft and Space programs.
Operating income rose 1% to $361 million, whereas operating margin contracted 10 basis points (bps) to 10.6%.
Mission Systems: Segment sales increased 9% to $3,128 million on higher sales in Cyber and ISR, Advanced Capabilities, and Sensors and Processing business areas.
Operating income rose 15.9% to $408 million while operating margin expanded 80 bps to 13%.
Technology Services: Sales at this segment dipped 0.4% to $1,044 million, owing to lower Global Services sales.
Operating income increased 19% to $113 million, with operating margin expansion of 170 bps to 10.8%.
Innovation Systems: Second-quarter 2019 sales in this segment increased 8% to $1,498 million compared with proforma sales of $1,400 million in the second quarter of 2018. The increase was principally due to higher sales at Flight Systems and Defense Systems.
Meanwhile, the segment’s operating income totaled $169 million and operating margin expanded 150 bps to 11.3%.
Northrop Grumman Corporation Price, Consensus and EPS Surprise
Northrop Grumman Corporation price-consensus-eps-surprise-chart | Northrop Grumman Corporation Quote
Operational Update
Total operating costs and expenses at the end of the quarter were $7,510 million, up 19.2% from the year-ago quarter’s $6,302 million.
Operating income during the quarter increased 15.8% to $946 million.
Financial Condition
Northrop Grumman’s cash and cash equivalents as of Jun 30, 2019, were $1,088 million, down from $1,579 million as of Dec 31, 2018.
Long-term debt (net of current portion) as of Jun 30, 2019, was $13,838 million, down from $13,883 million as of Dec 31, 2018.
Net cash inflow from operating activities as of Jun 30, 2019, was $694 million compared with $638 million as of Jun 30, 2018.
2019 Guidance
Northrop Grumman expects to generate revenues of $34 billion during 2019. The Zacks Consensus Estimate for the company’s full-year sales, pegged at $33.91 billion, lies below its projected view.
It continues to project free cash flow of $2.6-$3 billion for 2019.
However, Northrop Grumman raised its full-year earnings expectations from $18.90-$19.30 to $19.30-$19.55 per share. The Zacks Consensus Estimate for the company’s 2019 earnings, pegged at $19.41, lies slightly below the mid-point of the company’s guidance.
Zacks Rank
Northrop Grumman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Textron Inc. (TXT - Free Report) reported second-quarter 2019 earnings from continuing operations of 93 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 9.4%. The bottom line also increased 6.9% from 87 cents in the year-ago quarter.
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2019 earnings of $5 per share, which surpassed the Zacks Consensus Estimate of $4.74 by 5.5%. The bottom line also improved 23.5% from $4.05 in the year-ago quarter.
Upcoming Defense Releases
Raytheon Company is scheduled to report second-quarter 2019 results on Jul 25.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>