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Northrop Grumman (NOC) Earnings and Revenues Top in Q4

Northrop Grumman CorporationNOC reported fourth-quarter 2016 adjusted earnings of $2.66 per share, beating the Zacks Consensus Estimate of $2.49 by 6.8%. Reported earnings were also up 22% from $2.18 recorded in the year-ago quarter.

Excluding after-tax pension adjustments, earnings came in at $2.96, up 18.9% year over year.

For full-year 2016, the company reported adjusted earnings of $11.05 per share, which missed the Zacks Consensus Estimate of $11.73 by 5.8%.

Total Revenue

In the fourth quarter of 2016, Northrop Grumman reported total revenue of $6.40 billion, beating the Zacks Consensus Estimate of $5.91 billion by 8.3%. Revenues also increased 12.3% from the year-ago figure of $5.69 billion.

For 2016, Northrop Grumman reported total revenue of $24.51 billion, beating the Zacks Consensus Estimate of $24.04 billion by 1.96%.

Segmental Details

Aerospace Systems: Segment sales of $2.87 billion increased 19.7% year over year on the back of higher volumes for the manned aircraft and autonomous systems programs.

Operating income also improved 18.5% to $327 million, while operating margin contracted 10 basis points (bps) to 11.4%. Higher operating income was driven by gain on a property sale and improved performance by Autonomous Systems programs.

Mission Systems: Segment sales improved 9% to $2.85 billion due to higher sales volume across all reporting areas.

Operating income also increased 7.4% to $390 million on account of higher sales volume and gain on the sale of a commercial cyber business. Meanwhile, operating margin declined 20 bps to 13.7%.

Technology Services: Sales at the segment were $1.21 billion, up 7.8%, driven by higher sales volume across all reporting areas.

Operating income remained flat at $125 million while operating margin declined 90 bps to 10.3%.

Northrop Grumman Corporation Price, Consensus and EPS Surprise

Northrop Grumman Corporation Price, Consensus and EPS Surprise | Northrop Grumman Corporation Quote

Operational Update

Total operating cost and expenses at the end of 2016 was $21.32 billion, up 4.2%.

Operating income during 2016 also increased 3.8% to $3.19 billion.

Financial Condition

Northrop Grumman's cash and cash equivalents as of Dec 31, 2016 were $2.54 billion, up from $2.32 billion as of Dec 31, 2015.

Long-term debt (net of current portion) as of Dec 31, 2016, was $7.06 billion, up from $6.39 billion as of Dec 31, 2015.

Net cash from operating activities as of Dec 31, 2016 was $2.81 billion, compared with the year-ago figure of $2.16 billion.

2017 Guidance

Northrop Grumman expects revenues of $25 billion during 2017. On the bottom-line front, the company expects to generate earnings in the range of $11.30-$11.60.

Also, the company maintains its free cash flow guidance in the range of $1.8-$2 billion.

Other Aerospace & Defense Releases

Rockwell Collins Inc. COL reported financial results for first-quarter fiscal 2017 ended Dec 31, 2016. The company's adjusted earnings per share of $1.20 surpassed the Zacks Consensus Estimate of $1.15 by 4.3%.

Lockheed Martin Corp. LMT reported fourth-quarter 2016 earnings from continuing operations of $3.25 per share, surpassing the Zacks Consensus Estimate of $3.04 by 6.9%. Earnings also increased 23.6% from the year-ago level, courtesy of strong revenue and operating margin growth.

Textron Inc. TXT reported fourth-quarter 2016 adjusted earnings from continuing operations of 80 cents per share, missing the Zacks Consensus Estimate of 87 cents by 8%.

Zacks Rank

Northrop Grumman currently has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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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.

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