October 28, 2015 / 11:05 AM / in 2 years

Northrop third-quarter results top estimates, 2015 profit outlook raised

A B-2 Stealth Bomber performs a flyover at the 126th Rose Parade in Pasadena, California, in this file photo taken January 1, 2015. REUTERS/David McNew/Files

WASHINGTON (Reuters) - Hours after winning a multibillion-dollar contract to build a new U.S. bomber, Northrop Grumman Corp (NOC.N) reported higher-than-expected quarterly revenue and earnings on Wednesday, and increased its profit outlook for the full year.

Northrop, maker of the current B-2 bomber and Global Hawk unmanned planes, reported a 9 percent rise in third-quarter net profit to $516 million, or $2.75 per share, from $473 million, or $2.26 per share, a year earlier. Revenue edged up to $5.99 billion from $5.98 billion.

Analysts polled by Thomson Reuters I/B/E/S looked for earnings per share of $2.19 on revenue of $5.86 billion.

The company’s share price jumped 5.5 percent to $190.60 on the New York Stock Exchange.

On Tuesday Northrop beat out a Boeing Co (BA.N) and Lockheed Martin Corp (LMT.N) team to develop and build a next-generation long-range strike bomber for the U.S. Air Force. Analysts said the deal could be valued at up to $80 billion.

In a conference call after the earnings release, Chief Executive Officer Wesley Bush said an organizational realignment announced earlier his month was not intended to separate its services businesses.

The realignment would lower costs in the long term, but the company did not expect any material effect on costs this year, said Chief Financial Officer Ken Bedingfield.

Northrop raised its outlook for full-year 2015 earnings to $9.70 to $9.80 per share, from $9.55 to $9.70. It now expects 2015 revenue at $23.6 billion to $23.8 billion, raising the lower end of the previous range from $23.4 billion.

Overall operating income rose 3 percent and the operating margin increased to 13.3 percent from 12.9 percent due to higher pension adjustments and a $21 million decrease in corporate expenses.

Northrop said at the end of the quarter, $4.6 billion remained on its share repurchase program, but it will not introduce a new target for buybacks.

“Going forward we will return to our prior approach of assessing our repurchases from time to time in the context of our capital deployment strategy which has not changed,” Bush said during the call.

Bush said the international market accounted for 15 percent of its business so far this year and it was seeing interest from Europe on the Triton plane.

Reporting by Andrea Shalal and Idrees Ali; Editing by W Simon and JS Benkoe

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