Credit: Shutterstock photoNorthrop Grumman ( NOC ) topped fourth-quarter earnings estimates Thursday morning, while fellow defense contractor Raytheon ( RTN ) reported mixed results, joining General Dynamics ( GD ) a day earlier.
Northrop Grumman
[ibd-display-video id=3104805 width=50 float=left autostart=true ] Estimates: EPS is seen climbing 3.4% to $2.75 with revenue dipping 0.4% to $6.37 billion, according to Zacks Investment Research.
Results: Northrop Grumman profit rose to $2.84 a share. Sales climbed 4% to $6.63 billion. Aerospace sales rose 5% to $3 billion, mission systems sales climbed 6% to $3.025 billion, while technology services sales dipped 1% to $1.2 billion.
Outlook: Northrop sees 2018 EPS of $15-$15.25 on sales of $27 billion. Analysts expect $13.90 EPS with revenue of $27.04 billion.
Northrop also raised its quarterly dividend by 10% to $1.10 a share.
Stock: Shares rose 3.7% to 325.09 on the stock market today .
Northrop Grumman is a major subcontractor on the Lockheed Martin ( LMT ) F-35 and has been benefiting as production ramps up and orders keep rolling in. But the company dropped out of the running to develop a drone for the Navy , despite its history with the Global Hawk drone and X-47B prototype.
Meanwhile, Northrop's deal in September to buy Orbital ATK ( OA ) for $9.2 billion will also give the defense giant key space and missile-defense assets as those sectors heat up.
But a failure to put a Northrop spy satellite into orbit has put scrutiny on the company's space division. Little is known about the Zuma satellite except that Northrop made it for a government customer and it was supposed to be launched into low Earth orbit.
SpaceX, which provided launch services, has said its Falcon 9 rocket "did everything correctly" while Northrop has declined to comment, citing the classified nature of the mission.
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Raytheon
Estimates: EPS is seen up 7.4% to $2.02 with revenue climbing 9.6% to $6.83 billion.
Results: EPS was $2.03 adjusted for various items, including a 59-cent hit related to tax reform and 9 cents for pension contributions. Revenue rose 8% to $6.78 billion. Bookings grew 12.6% to $8.54 billion. Backlog at the end of 2017 was $38.2 billion, up 4% from a year ago.
Sales of integrated defense systems, which include the Patriot air and missile defense system, rose 6% to $1.55 billion. Intelligence, information and services sales climbed 4% to $1.57 billion. Missile systems sales jumped 15% to $2.185 billion, led by the Advanced Medium-Range Air-to-Air Missiles, Standard Missile-3 and Paveway programs. Space and airborne system sales grew 4% to $1.67 billion.
Outlook : Full-year EPS of $9.55-$9.75 on sales of $26.4 billion-$26.9 billion. Analysts see EPS of $9.70 on sales of $26.65 billion.
Stock: Shares advanced 2.5% to 203.04.
Raytheon has been a major beneficiary of the growing demand for missile defense systems. The Patriot, which was purchased by Romania last summer. A big Patriot contract with Poland was also signed last year, while countries in the Middle East and Asia are considering the missile defense system.
On Wednesday, General Dynamics reported adjusted earnings that beat views, but revenue fell short. Shares fell intraday but rallied to close up 5.7%, blasting out of a cup-with-handle base to a record high. General Dynamics added 3.3% on Thursday.
Lockheed Martin, which typically kicks off defense earnings season, will report results Monday.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
