Northrop Beats 2Q Earnings and Posts Solid Guidance

Military

Published: July 29, 2015 10:02 am

Last Updated: April 28, 2020 2:52 am

Source: U.S. Air Force

Northrop Grumman Corp. (NYSE: NOC) released its second-quarter earnings report Wednesday before the markets opened. The company had $2.74 in earnings per share (EPS) on $5.90 billion in revenue compared to Thomson Reuters consensus estimates of $2.36 in EPS on $6.04 billion in revenue. The same quarter from last year had $2.37 in EPS on $5.93 billion in revenue.

The company updated its guidance for the 2015 full year: it maintained sales in the range of $23.4 billion to $23.8 billion and raised its EPS forecast to a range of $9.55 to $9.70 from $9.40 to $9.60. There are consensus estimates of $9.62 in EPS on $23.76 billion in revenue.

Total backlog at the end of June was $37.0 billion compared to $38.2 billion at the end of December 2014.

The company repurchased 6.8 million shares of its common stock for $1.1 billion in the second quarter of 2015. As of June 30, 2015, the company had repurchased 54.3 million shares toward its previously announced goal of retiring 60 million shares of its common stock by the end of 2015.

In terms of its segments Northrop reported (in comparison to the same period of the previous year):

Aerospace Systems remained flat at $2.51 billion with an operating margin of 12.8%.
Electronic Systems decreased 3% to $1.68 billion with an operating margin of 15.7%.
Information Systems decreased 5% to $1.49 billion with an operating margin of 10.1%.
Technical Services decreased 2% to $720 million with an operating margin of 9.3%.

Wes Bush, Chairman, CEO and President of Northrop, commented on earnings:

Our team continues to create value through strong operational performance and effective cash deployment. Going forward we will continue to focus on portfolio, performance and cash deployment as value creation drivers for our shareholders, customers and employees. Our portfolio affords us a unique and robust opportunity set, and we are optimistic about our future.

At the end of the second quarter, the company had $1.91 billion in cash and cash equivalents compared to $3.86 billion at the end of December 2014.

Shares of Northrop were up 3.1% at $168.38 on Monday morning. The stock has a consensus analyst price target of $174.14 and a 52-week trading range of $118.24 to $172.30.

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